CITY OF BURLINGTON VERMONT COMPREHENSIVE ANNUAL … · provides local bus service. Form of...

CITY OF BURLINGTON VERMONT

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR FISCAL YEAR ENDED JUNE 30, 2017

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CITY OF BURLINGTON, VERMONT Comprehensive Annual Financial Report

For the Year Ended June 30, 2017

Prepared by: The Clerk Treasurer Office

Rich Goodwin Ann Barton Director of Financial Operations Comptroller

CITY OF BURLINGTON, VERMONT

TABLE OF CONTENTS PAGE INTRODUCTORY SECTION: Transmittal Letter 3 Organization Chart 8 Principal Officials 9 Department and Division Heads 10 Certificate of Achievement 11 FINANCIAL SECTION: INDEPENDENT AUDITORS’ REPORT 15 MANAGEMENT’S DISCUSSION AND ANALYSIS 21 BASIC FINANCIAL STATEMENTS:

Government-wide Financial Statements:

Statement of Net Position 34

Statement of Activities 36 Fund Financial Statements:

Governmental Funds:

Balance Sheet 38

Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities in the Statement of Net Position 39

Statement of Revenues, Expenditures, and Changes in Fund Balances 40

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 41

General Fund Statement of Revenues and Other Sources, and Expenditures and Other Uses - Budget and Actual 42 Proprietary Funds:

Statement of Net Position 43

Statement of Revenues, Expenses, and Changes in Fund Net Position 45

Statement of Cash Flows 46

Fiduciary Funds:

Statement of Fiduciary Net Position 48

Statement of Changes in Fiduciary Net Position 49 Notes to Financial Statements 50 REQUIRED SUPPLEMENTARY INFORMATION

Pension:

Schedule of Proportionate Share of the Net Pension Liability 117

Schedule of Pension Contributions 118

Schedule of Changes in the Employers’ Net Pension Liability 119 OPEB:

Schedules of OPEB Funding Progress 120 SUPPLEMENTARY STATEMENTS AND SCHEDULES

Combining Financial Statements:

Governmental Funds:

Combining Balance Sheet – Nonmajor Governmental Funds 126

Combining Statement of Revenues, Expenditures, and Changes in Fund Equity – Nonmajor Governmental Funds 132 Proprietary Funds:

Combining Statement of Net Position – Nonmajor Proprietary Funds 138

Combining Statement of Revenues, Expenses, and Changes in Fund Net Position – Nonmajor Proprietary Funds 139

Combining Statement of Cash Flows – Nonmajor Proprietary Funds 140 Fiduciary Funds:

Combing Statement of Fiduciary Net Position – Private Purpose Trust Funds 142

Combing Statement of Change in Fiduciary Net Position – Private Purpose Trust Funds 143 STATISTICAL SECTION: Financial Trends

Net Position by Component – Last Ten Years 148

Changes in Net Position – Last Ten Years 149

Fund Balances of Governmental Funds – Last Ten Years 151

Changes in Fund Balances of Governmental Funds – Last Ten Years 152 Revenue Capacity

Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 153

Property Tax Rates – Direct and Overlapping Governments - Last Ten Fiscal Years 154

Principal Property Taxpayers – Current Year and Nine Years Ago 155

Property Tax Levies and Collections – Last Ten Fiscal Years 156 Debt Capacity

Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 157

Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years 158

Direct and Overlapping Governmental Activities Debt – June 30, 2016 159

Legal Debt Margin Information – June 30, 2016 160

Airport Enterprise Fund Bond Coverage – Last Ten Fiscal Years 161 Demographic and Economic Information

Demographic and Economic Indicators – Last Ten Years 162

Principal Employers – Current Year and Nine Years Ago 163 Operating Information

Full Time Equivalent Employees by Function/Program – Last Ten Years 164

Operating Indicators by Function/Program – Last Ten Years 165

Capital Asset Statistics by Function/Program – Last Ten Years 166

INTRODUCTORY SECTION

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_____________, 2018 Mayor and City Council City of Burlington 149 Church Street Burlington, Vermont 05401 To the Citizens, Mayor, and City Council of the City of Burlington: The Comprehensive Annual Financial Report of the City of Burlington for the Fiscal Year ended June 30, 2017, is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the following data, including financial statements, supporting schedules and statistical tables, is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the City. To provide a reasonable basis for making representations, management has established a comprehensive internal control framework that is designed to both protect the government’s assets from loss, theft, or misuse and compile sufficient reliable information to the preparation of the financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Fiscal year 2017 represents the second year that the City of Burlington has compiled a Compre-hensive Annual Financial Report (CAFR). The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Burlington for its Comprehensive Annual Financial Report for the fiscal year ending June 30, 2016. The compilation of this report required a substantial time investment by the Clerk/Treasurer’s Office, but we are proud to continue our commitment to expanded disclosures of our financial position and results of operations. City Charter, as well as State statues, requires an annual audit by independent certified public accounts. The City’s audit firm is Melanson Heath. The independent auditors’ report is located at the front of the financial section of this report. In addition, the audit was designed to meet the requirements of the Single Audit Act Amendments of 1996, including requirements relating to preparation of the schedule of expenditures of federal awards, or Title 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (the Uniform Guidance), as applicable. Information related to the Single Audit, includ-ing the Schedule of Expenditures of Federal Awards, findings and recommendations, and auditor’s reports on the internal control structure and compliance with applicable laws and regulations, is not included in this year’s CAFR but is available in a separate report. Management’s discussion and analysis (MD&A) immediately follows the independent auditors’ report and provides a narrative introduction, overview, and analysis of the basic financial

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statements. MD&A complements this letter of transmittal and should be read in conjunction with it for additional narrative overview and analysis of the City’s activities.

THE CITY OF BURLINGTON The source for this section is the Introduction to Official Statement, dated November 29, 2017. Description of the City The City of Burlington, Vermont (the “City”) is the largest city in Vermont and located in northwestern Vermont on the eastern shore of Lake Champlain directly across from northern New York State. The City is the commercial center of Chittenden County and encompasses 16 square miles. The City is 90 miles south of Montreal, Quebec, 220 miles northwest of Boston, Massachusetts, and 300 miles north of New York, New York. Highways serving Burlington include State Highways 2 and 7 and Interstates U.S. 89 and 189. The Lake Champlain Transportation Company operates ferries on Lake Champlain between Vermont and New York. The Burlington International Airport serves over 1.2 million passengers per year and accom-modates non-stop air service to all three New York City area airports, Philadelphia, both Washington D.C. airports, Chicago, Atlanta, Charlotte, NC, Orlando/Sanford, FL, Detroit, and seasonally to Toronto. Passengers can reach nearly any destination world-wide with just one connection from Burlington. Bus service is provided by Greyhound Lines, Megabus, and Vermont Trans Lines (operated by Vermont Agency of Transportation). Freight service is provided by the Vermont Railway Corporation and Rail America. The Chittenden County Transportation Authority, which rep-resents Burlington, Essex Junction, South Burlington, Shelburne, Charlotte and Winooski, provides local bus service. Form of Government Burlington was incorporated as a City in 1865. On November 7, 2000, voters approved amend-ments to the City Charter providing for direct Mayoral appointment of department heads with City Council confirmation, clarified the Mayor’s authority as the City’s Chief Executive Officer, established the position of Chief Administrative Officer, and provided that City com-missions would become advisory except when authority was re-delegated by the City Council. City Services The City provides the full range of municipal services including police and fire protection, emergency medical services, street construction and maintenance, solid waste management, traffic signalization, planning and zoning, community and economic development, parks and recreation, library services, youth services, arts programs, educational and general adminis-trative services. The City also operates the following major enterprise funds: (1) electric, (2) water, (3) sewage collection and treatment, (4) airport facilities and (5) telecommunication services.

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Community Amenities Located between the highest section of the Green Mountains and the widest part of Lake Champlain, the City of Burlington enjoys superb scenery and outstanding year-round recrea-tional opportunities. Cultural activities abound and are encouraged by the participation of businesses, educational institutions, and government. Several theaters for the performing arts, theater troupes, muse-ums, fairs, and festivals fill the City’s cultural calendar, while Burlington City Arts, a City Department, provides a well-known gallery for the display of contemporary art, as well as events including music, film, and performance. The University of Vermont Medical Center is the state’s academic medical center and serves approximately one million people in Vermont and New York. UVM Medical Center includes three founding organizations – Medical Center Hospital of Vermont, Fanny Allen Hospital, and University Health Center – and the UVM College of Medicine. The Vermont Regional Cancer Center and the Vermont-New Hampshire Regional Red Cross Blood Center are also located in Greater Burlington. Burlington is also known throughout the state and the nation for its innovative and entre-preneurial spirit. The City of Burlington was the first city in the country to use 100% renewable energy for the electricity needs of its residents. The Burlington International Airport is leading the industry with its continued amenity upgrades, such as the Mamava nursing mothers’ pod, green roof which includes solar panels and a garden, as well as free wifi and convenient access. Meanwhile a range of notable companies, from Seventh Generation to Dealer.com to Burton, are proud to call Burlington home. Burlington is regularly recognized in nationally published periodicals as one of the best places to live. The City’s location, economic climate, and abundance of community resources con-tributed to its award as the most livable city in America for cities of less than 100,000 people by the U.S. Conference of Mayors in 1989. Since then, the City has enjoyed numerous awards from national publications recognizing the City for its beauty, sustainability, and livability. Highlights include: In 2008 a U.S. Centers for Disease Control and Prevention named the City America’s healthiest city. In May 2010, Forbes.com named the City “prettiest town in America” and “one of the best cities for new jobs this spring”. In June 2010, Kiplinger’s recognized Burlington as “one of the 10 best cities in the United States for the decade.” In December 2010, the City received a Home Depot Foundation Award of “Excellence for Sustainable Community Development.” In March 2011, Gallup-Healthways Poll listed the City as #1 of the top 10 small cities for well-being.

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In October 2011, Livability.com Magazine listed the City as #3 in its top 10 downtowns ranking. In 2012, Gallup-Healthways Poll ranked the City #3 of the top 10 cities in the nation for well-being. Cheapflights.com ranked the Burlington International Airport 4th in the United States for airport affordability based on August 2013 prices In September 2013, Kiplinger ranked the City #2 on their “Great Places to Live” list. In August 2014, The SpareFoot Blog ranked the City #10 among top 12 college towns for commuting. In 2015, Men’s Health Magazine named the City as “Top 10 Places to Live Now. Economic Activity The Greater Burlington area, which includes the City of Burlington and all of Chittenden County, is Vermont’s major economic area. Most of the County’s nonfarm employment lies within the three-community region of Burlington, Essex and South Burlington. Manufacturing employ-ment represents approximately 10% of the nonagricultural employment in the Burlington area labor market. Non-manufacturing employment accounts for approximately 90% of employment. Education and health services, government and trade are principal areas of non-manufacturing employment in the Greater Burlington area. Chittenden County has provided the bulk of the State’s economic growth over the past ten years, which is reflected in the area’s employment statistics. The Burlington Labor Market Area had an annual unemployment rate of 2.9% in June 2015. The State’s unemployment rate was 3.6% as of June 2015. Employment Data The Greater Burlington area possesses a growing, educated work force with skills in a variety of areas. To keep a supply of workers skilled to meet the needs of new and existing business and industry, the State of Vermont assists with tuition-free training of new Vermont employees. Educational institutions, such as the University of Vermont, provide customized training pro-grams and continuing education required by technicians and others in rapidly changing tech-nological fields. Employment opportunities in Burlington and Chittenden County have grown to more than match growth in the area’s work force. Housing Market Since 2010 and through December 2015, the median sales price of single family homes in Burlington increased 12.9% to $310,000. During that same period, condominium sales prices have increased 6.7% to $230,000. The City contains approximately 6,675 owner-occupied

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housing units, accounting for 16% of Chittenden County’s 42,085 owner-occupied units. The number of single family primary residences sold in Burlington has remained relatively stable since tracking data began in 1988, though 2015 showed a 25% increase against the average. Single family home sales in 2015 were 229. A number of homes sold in Burlington that fall below the median sale price are purchased through Champlain Housing Trust (CHT) or Green Mountain Habitat for Humanity. CHT and Green Mountain Habitat for Humanity have placed resale restriction covenants on over 236 homes in Burlington. These organizations receive operating or development grants from the City in order to ensure an adequate supply of homes for low- and moderate-income residents. The rental housing market in Burlington remains very strong, though low vacancy rates pose a challenge for prospective renters. According to the December 2015 Allen & Brooks Report, Burlington’s rental vacancy rate is 3.0%. The low vacancy rate pushes demand for rental housing up which results in increased rental rates. Various forms of rental housing assistance for low to moderate-income households are provided by the Burlington Housing Authority, Champlain Housing Trust, and several other nonprofit housing corporations. Acknowledgements This report reflects the City’s commitment to improve and maintain financial statements in conformity with the highest standards of accountability. The strong financial position and excellent financial results reflected in this report would not have been possible without the leadership, and fiscal policies established by the Mayor, City Council, Chief Administrative Officer, and the hard work and dedication of the finance and accounting team. Respectfully submitted,

Beth Anderson Rich Goodwin Interim Chief Administrative Officer Director Financial Operations

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As of June 30, 2017

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CITY OF BURLINGTON, VERMONT PRINCIPAL OFFICIALS

Initial Term Current Term

Commenced Expires Miro Weinberger Mayor 2012 2018

City Council

Sharon Foley Bushor Ward 1 1987 2018 Max Tracy Ward 2 2012 2018 Sara Moore Ward 3 2015 2018 Kurt Wright Ward 4 2013 2018 William “Chip” Mason Ward 5 2012 2018 Karen Paul Ward 6 2008 2018 Ali Dieng Ward 7 2017 2018 Adam Roof Ward 8 2015 2018 Richard Deane East District 2017 2019 Jane Knodell, President Central District 2013 2019 Dave Hartnett North District 2011 2019 Joan Shannon South District 2003 2019

Clerk Treasurer Office

Beth Anderson Interim Chief Administrative Officer Rich Goodwin Director Financial Operations Ann Barton Darlene Bayko Amy Bovee Lori Olberg

Comptroller Banking and Cash Operations Manager Assistant City Clerk License / Voter/ Records Coordinator

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CITY OF BURLINGTON, VERMONT DEPARTMENT AND DIVISION HEADS

OFFICE OF THE MAYOR Mayor Miro Weinberger

CLERK TREASURER’S OFFICE Chief Administrative Officer Robert Rusten Director of Financial Operations Rich Goodwin Comptroller Ann Barton

LEGAL City Attorney & Corporate Counsel Eileen Blackwood

INNOVATION & TECHNOLOGY Chief Innovation Officer Beth Anderson

HUMAN RESOURCES Direct of Human Resources Susan Leonard

POLICE DEPARTMENT Chief of Police Brandon del Pozo Deputy Chief Jannine Wright Deputy Chief Shawn Burke

FIRE DEPARTMENT Chief Engineer Steven Locke Deputy Chief of Administration Peter Brown Deputy Chief of Operations Aaron Collette

DEPARTMENT OF PUBLIC WORKS Director Chapin Spencer City Engineer/ Assistant Director Technical Services Norman Baldwin Assistant Director Maintenance Division Robert Green Assistant Director Parking and Traffic Division Patrick Mulligan Assistant Director Water Resources Megan Moir

CODE ENFORCEMENT Code Enforcement Director William Ward

PARKS, RECREATION & WATERFRONT Director & Harbormaster Jesse Bridges

COMMUNITY & ECONOMIC DEVELOPMENT OFFICE Director Noelle MacKay

FLETCHER FREE LIBRARY Director Mary Danko

SCHOOL DEPARTMENT Superintendent Yaw Obeng

ASSESSOR’S OFFICE City Assessor John Vickery

BURLINGTON INTERNATIONAL AIRPORT Director of Aviation Eugene Richards

CHURCH STREET MARKETPLACE Executive Director Ron Redmond

BURLINGTON TELECOM General Manager Stephen Barraclough

BURLINGTON CITY ARTS Executive Director Doreen Kraft

BURLINGTON ELECTRIC DEPARTMENT General Manager Nealle Lunderville

PLANNING & ZONING Director David White

As of June 30, 2017

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FINANCIAL SECTION

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INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and City Council City of Burlington, Vermont Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Burlington, Vermont (the City), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents. Management’s Responsibility for the Financial Statements The City’s management is responsible for the preparation and fair presentation of these finan-cial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Burlington Electric Enterprise Fund which repre-sents 40 percent, 27 percent, and 59 percent, of the assets and deferred outflows, net position and revenues of the business-type activities respectively. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Burlington Electric Enterprise Fund and its effects on the business-type activities, is based solely on the report of the other auditors. Also, we did not audit the financial statements of the Burlington School District, which represents 100 percent of the aggregate discretely presented component units. The financial statements of Burlington School District were audited by other auditors whose report thereon has been fur-nished to us, and our opinion, insofar as it relates to the amounts included for the School District is based solely on the report of the other auditors. We conducted our audit in accord-ance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are

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free from material misstatement. The financial statements of the Burlington Electric Depart-ment, a major proprietary fund, were not audited in accordance with Government Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judg-ment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the pur-pose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of account-ing policies used and the reasonableness of significant accounting estimates made by manage-ment, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, the aggregate discretely presented component units, and the aggregate remaining fund information of the City, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Manage-ment’s Discussion and Analysis, and the Pension and OPEB schedules appearing on pages 117 to 120 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with evidence sufficient to express an opinion or provide any assurance.

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Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial state-ments themselves, and other additional procedures in accordance with auditing standards gen-erally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated ______________, 2018 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

___________, 2018

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BASIC FINANCIAL STATEMENTS

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MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Burlington (the City), we offer readers this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2017.

A. OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the basic financial statements. The basic financial statements comprise three components: (1) government-wide financial statements, (2) fund financial statements, and (3) notes to financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of our finances in a manner similar to a private-sector business. The Statement of Net Position presents information on all assets, liabilities, and deferred outflows/inflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position is improving or deteriorating. The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes, earned but unused vacation leave, and net pension liability). Both of the government-wide financial statements distinguish functions that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities include general gov-ernment, public safety, public works, culture and recreation, and community development. The business-type activities include the operation of the Airport, Electric, Water, Waste-water, and Stormwater Utilities, Telecommunications (including cable television, Internet access, and telephone service). Fund financial statements. A fund is a grouping of related accounts that is used to main-tain control over resources that have been segregated for specific activities or objectives. Fund accounting is used to ensure and demonstrate compliance with finance-related legal requirements. All of the funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial

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statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources measurable and available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and gov-ernmental activities. An annual appropriated budget is adopted for the general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. Proprietary funds. Proprietary fund reporting focuses on the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. The proprietary fund category includes enterprise funds. Enterprise funds are used to report activity for which a fee is charged to external users, and must be used when one of the following criteria are met: (1) activity is financed with debt that is secured solely by a pledge of the net revenues from fees and charges, (2) laws or regulations require the activity’s cost of providing services be recovered with fees and charges, and (3) the pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs such as depreciation or debt service. The primary focus on these criteria is on fees charged to external users. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements, only in more detail. Specifically, enterprise funds are used to account for Airport, Electric, Telecom, Wastewater, Water, and Stormwater. The proprietary fund finan-cial statements provide separate information for the Airport and Electric which are con-sidered to be major funds. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information which is required to be disclosed by accounting principles generally accepted in the United States of America.

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B. FINANCIAL HIGHLIGHTS

As of the close of the current fiscal year, the total of assets and deferred outflows exceeded liabilities and deferred inflows by $330,109,409 (i.e., net position), a change of $12,639,991 in comparison to the prior year.

As of the close of the current fiscal year, governmental funds reported combined ending fund balances of $35,103,434, a change of $10,937,677 in comparison to the prior year.

At the end of the current fiscal year, unassigned fund balance for the general fund was $8,409,087, a change of $1,888,592 in comparison to the prior year.

Total net position of the City’s component unit, the Burlington School District, amounted to $______, an increase of $______ for the year

The nonspendable portion of the governmental funds balance was $3,037,839 which consists of inventories, prepaid assets, and permanent funds, as well as general fund advances to other funds not expected to be repaid within a short period of time. $18,528,173 of the governmental funds balance is restricted for specific purposes. In addition, $5,559,637 is committed for purposes funded by dedicated revenue. The City has assigned $3,619,252 for the fiscal year 2018 budget. This leaves the City with a total unassigned fund balance of $4,358,533. The City’s general fund unassigned fund balance was $8,409,087. See the note to the financial statements for definitions of types of fund balances.

C. GOVERNMENT-WIDE FINANCIAL ANALYSIS

The following is a summary of condensed government-wide financial data for the current and prior fiscal years.

2017 2016 2017 2016 2017 2016

Current and other assets $ 55,272 $ 47,197 $ 110,272 $ 97,796 $ 165,544 $ 144,993 Capital assets 140,393 134,091 308,448 299,941 448,841 434,032

Total assets 195,665 181,288 418,720 397,737 614,385 579,025

Deferred outflows of resources 22,935 11,476 10,257 7,070 33,192 18,546

Total assets and deferred outflows $ 218,600 $ 192,764 $ 428,977 $ 404,807 $ 647,577 $ 597,571

Long-term liabilities outstanding $ 117,064 $ 93,519 $ 170,337 $ 164,264 $ 287,401 $ 257,783 Other liabilities 9,012 9,248 17,296 12,651 26,308 21,899

Total liabilities 126,076 102,767 187,633 176,915 313,709 279,682

Deferred inflows of resources 3,189 1,770 569 - 3,758 1,770

Net position:Net investment in capital assets 98,442 92,236 188,464 179,096 286,906 271,332 Restricted 13,086 17,725 22,671 20,813 35,757 38,538 Unrestricted (22,193) (21,734) 29,640 27,983 7,447 6,249

Total net position 89,335 88,227 240,775 227,892 330,110 316,119

Total liabilities, deferred inflows of resources and net position $ 218,600 $ 192,764 $ 428,977 $ 404,807 $ 647,577 $ 597,571

NET POSITION (000s)Governmental

ActivitiesBusiness-Type

Activities Total

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2017 2016 2017 2016 2017 2016Revenues:

Program revenues:Charges for services $ 23,774 $ 25,439 $ 103,395 $ 105,128 $ 127,169 $ 130,567 Operating grants and contributions 4,110 4,516 218 205 4,328 4,721 Capital grants and contributions 3,233 4,688 11,026 9,119 14,259 13,807

General revenues:Property taxes 33,253 31,409 - - 33,253 31,409 Rooms and meals tax 4,034 3,907 - - 4,034 3,907 Local sales option tax 2,329 2,240 - - 2,329 2,240 Payment in lieu of tax 5,249 5,079 - - 5,249 5,079 Franchise fees 2,162 2,377 - - 2,162 2,377 Impact fees 346 139 - - 346 139 Interest and penalties on delinquent taxes 303 339 - - 303 339 Investment income 249 194 159 185 408 379 Dividends from associated companies - - 3,517 3,236 3,517 3,236 Other revenue 1,699 642 513 274 2,212 916

Total revenues 80,741 80,969 118,828 118,147 199,569 199,116

Expenses:Governmental activities:

General government 12,335 11,354 - - 12,335 11,354 Public safety 29,095 23,501 - - 29,095 23,501 Public works 16,129 15,484 - - 16,129 15,484 Culture and recreation 14,186 10,067 - - 14,186 10,067 Community development 4,941 4,895 - - 4,941 4,895 Interest on long-term debt 2,148 1,782 - - 2,148 1,782

Business-type activities:Electric - - 63,450 63,913 63,450 63,913 Airport - - 20,369 19,754 20,369 19,754 Non-major - - 22,126 20,804 22,126 20,804

Total expenses 78,834 67,083 105,945 104,471 184,779 171,554

Change in net position before transfers, additions to permanent fund principal, and special items 1,907 13,886 12,883 13,676 14,790 27,562

Additions to permanent fund principal 4 4 - - 4 4 Special item (2,154) - - - (2,154) -

Change in net position (243) 13,890 12,883 13,676 12,640 27,566

Net position - beginning of year, as restated 89,578 74,337 227,892 214,216 317,470 288,553

Net position - end of year $ 89,335 $ 88,227 $ 240,775 $ 227,892 $ 330,110 $ 316,119

Governmental Activities

Business-TypeActivities Total

CHANGES IN NET POSITION (000s)

The largest portion of net position $286,905,700 reflects our investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure); less any related debt used to acquire those assets that is still outstanding. These capital assets are used to provide services to citizens; consequently, these assets are not available for future spending. Although the investment in capital assets is reported net of related debt, it should be noted that the

25

resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of net position of $35,757,638 represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position of $7,446,071 represents a combination of our governmental activities and business-type activities or enterprise funds. Our governmental activities unrestricted net position is $(22,193,434). The negative balance primarily results from recognizing our Net Pension Liability in accordance with Governmental Accounting Standards Board (GASB) Statement Number 68, Accounting and Financial Reporting for Pensions. See financial state-ment notes for additional information. Our business-type activities unrestricted net position is $29,639,505. The majority of this balance is derived from our Electric Enterprise Fund. Governmental activities. Governmental activities for the year resulted in a change in net position of $(242,662). Key elements of this change are as follows:

Capital grants and contributions $ 3,232,947 Change in net pension liability, net of related deferred outflows/inflows and net OPEB obligation (3,430,891) Other (44,718)

Total $ (242,662)

Business-type activities. Business-type activities for the year resulted in a change in net position of $12,882,653. Key elements of this change are discussed in Section D of the Management’s Discussion and Analysis.

D. FINANCIAL ANALYSIS OF THE CITY’S FUNDS

Governmental funds. The focus of governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing financing requirements. In particular, unassigned fund balance may serve as a useful measure of the City’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, governmental funds reported combined ending fund balances of $35,103,434, a change of $10,937,677 in comparison to the prior year. Key elements of this change are as follows:

General fund revenues and transfers in, in excess of expenditures and other financing uses $ 3,623,667 Special revenue fund revenues, transfers in and issuance of debt in excess of expenditures and transfers out (mostly Traffic and Downtown TIF) 1,846,382 Capital project fund revenues and other financing sources in excess of expenditures and transfers out 5,463,782 Other 3,846

Total $ 10,937,677

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The general fund is the chief operating fund. At the end of the current fiscal year, unassigned fund balance of the general fund was $8,409,087, while total fund balance was $15,623,745. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total general fund expenditures. Refer to the table below, and also Note 2A.

City General Fund 6/30/17 6/30/16 Change

Unassigned fund balance $ 8,409,087 $ 6,520,495 $ 1,888,592 14.2%Total fund balance $ 15,623,745 $ 12,000,078 $ 3,623,667 26.3%

% ofTotal General

Fund Expenditures

The general fund unassigned fund balance positive increase of $1,888,592 results from the positive operating results reported in the budget and actual comparative schedule. The following table summarizes the activity in the general fund unassigned fund balance:

Unassigned fund balance, June 30, 2016 $ 6,520,495 Budgeted surplus 975,084 Actual revenues greater than budgeted 836,962 Actual expenditures less than budgeted 2,060,641 Use of surplus for FY 18 (2,571,668) Timing (249,021)

Subtotal 7,572,493 Reduction in non-spendable fund balance 836,594

Unassigned fund balance, June 30, 2017 $ 8,409,087

The City issued $9,000,000 in fiscal stability bonds in fiscal year 2013 to reduce reliance on tax anticipation notes. In accordance with the Governmental Accounting Standards Board’s Statement 54, the City has classified the $7,410,000 remaining on the issue as a component of unassigned fund balance because the authorized stability bonds do not contain any specific spending purpose constraints. In fact, the bonds were issued as taxable bonds since the purpose was not to finance specific capital governmental projects for the City as is customarily financed by tax-exempt bonds. Without the issues of the stability bonds, the City’s unassigned fund balance would have been $999,087. In accordance with the bond resolution, as stated by Bond Council; the City can use the proceeds for working capital, and cash flow needs.

Proprietary funds. Proprietary funds provide the same type of information found in the business-type activities reported in the government-wide financial statements, but in more detail.

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A comparison of the unrestricted net position of each enterprise compared to the prior year is show below:

6/30/17 6/30/16 Change

Electric $ 17,717,352 $ 17,766,036 $ (48,684) Airport 5,903,887 4,062,573 1,841,314 Nonmajor funds: Telecom (710,074) 95,877 (805,951) Wastewater 2,906,296 3,015,900 (109,604)

Water 2,973,129 2,417,855 555,274 Stormwater 848,915 624,420 224,495

Total $ 29,639,505 $ 27,982,661 $ 1,656,844

Unrestricted Net Position

Specific factors concerning the finances of each proprietary fund are discussed below: The Electric Department net position at June 30, 2017 increased $1,103,639 when com-

pared to net position at June 30, 2016 primarily due to lower costs in 2017 for production expenses related to the purchase of woodchips at the Joseph C. McNeil Generating Station. Net position at June 30, 2016 increased $3,507,635 when compared to net position at June 30, 2015 due to lower costs in 2016 associated with the reduction and replacement of positions related to the voluntary buyout and increased capital con-tributions offsetting capital projects.

The Burlington International Airport’s unrestricted net position increased from the previous year due to a variety of reasons including principal debt service payments being less than asset depreciation (which reduced net investment in capital assets and increased unrestricted net position) and operations. For additional information, please refer the separate financial statements issued for the Airport Enterprise Fund.

The Burlington Telecom’s unrestricted net position decreased during fiscal year 2017 despite an overall increase in net position of $2,033,930. Telecom’s cash flows provided by operations were used to 1) acquire additional capital assets resulting in a $2,146,107 increase in net investment in capital assets component of net position, and 2) deposits increase in the Revenue Fund by $693,774, thereby leaving unrestricted net position reduced by ($805,951).

The net increase in the Wastewater, Water and Stormwater Funds (which are managed on a combined basis) is primarily the result of operations due to increased user fees.

E. GENERAL FUND BUDGETARY HIGHLIGHTS

The City approved a fiscal year 2017 budget of $69,173,467 including dedicated taxes, tax increment financing and interdepartmental charges that were netted against appropriations for the presentation on the budget and actual statement in the financial statements. The

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following is a reconciliation of the approved fiscal year 2017 appropriation with the amounts reported on the General fund budget and actual comparison statement on page 42:

City approved appropriation $ 69,713,467 Less dedicated taxes: Capital streets program (2,251,805) Open space (197,079) Housing Trust (197,079) Pennies for parks (364,960) Less tax increment (3,077,690) Less interdepartmental charges (2,622,475) Less other charges (465,416)

Appropriation reported $ 60,536,963

The City’s adopted general fund budget for fiscal year 2017 after amendments resulted in a surplus of $975,084. The adjusted actual performance (budgetary basis) resulted in reve-nues and other sources exceeding expenditures and other uses by $836,962. This variance is primarily attributable to:

Revenue from housing and development licenses and certificates exceeded budget expectations by over $500,000 due to several large projects requiring additional permitting including, but not limited to, BC Community Housing, Burlington Town Center, University of Vermont, and Champlain College. This revenue is included in charges for services category.

Revenue from building permits exceeded expectations by over $1,000,000.

A bond premium of $746,987 was recognized in fiscal 2017.

Various departments had significant unspent appropriations including, but not limited to, Police Department $349,000 most from salaries and wages, Public Works $350,000, and Parks & Recreation $335,000. Non-departmental expenses were over budget by ($263,000), partially caused by two budgeted attrition account lines totaling $350,000. Additionally, bond proceeds exceeded budgeted revenue and offset over-expense.

F. CAPITAL ASSET AND DEBT ADMINISTRATION

Capital assets. Total investment in capital assets for governmental activities at year-end amounted to $140,393,076 (net of accumulated depreciation), a change of $1,754,309 from the prior year. Total investment in capital assets for business-type activities at year-end amounted to $308,448,156 (net of accumulated depreciation), a change of $8,506,642 from the prior year. This investment in capital assets includes land, construction in progress, buildings, improvements, infrastructure, intangible assets, and vehicles, machinery, equip-ment, and furniture.

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Major capital asset events during the current fiscal year for Governmental Activities included the following (in thousands):

Parks special projects $2,477

Street capital $3,118

Traffic capital $1,571

Major capital asset events during the current fiscal year for Business-Type Activities can be found in the various stand-alone enterprise fund financial statements. Additional information on the City’s capital assets can be found in Note 12 on pages 78 to 82 of this report. Change in credit rating. On November 27, 2017 Moody’s Investor Service (Moody’s) assigned an A2 rating (from A3) to the City’s general obligation debt with a stable outlook. Moody’s rated the certificates of participation at Baa1 and Baa2, with a stable outlook. Long-term debt. The table below outlines our long-term debt (bonds payable) at the cur-rent and prior year end. Revenue bonds are backed by pledged revenues of the respective enterprise funds and other debt is backed by full faith and credit of the government.

6/30/17 6/30/16 Change

Governmental Activities:City $ 52,906,348 $ 44,244,286 $ 8,662,062

Business-Type Activities:Electric 74,520,714 74,720,714 (200,000) Airport 35,025,000 37,040,000 (2,015,000) Wastewater 14,302,946 15,190,949 (888,003) Water 3,478,005 228,006 3,249,999 Stormwater 356,741 375,504 (18,763)

Subtotal bussiness-type 127,683,406 127,555,173 128,233

Component Unit:School District - 29,025,876 (29,025,876)

Subtotal bussiness-type - 29,025,876 (29,025,876)

Total $ 180,589,754 $ 200,825,335 $ (20,235,581)

Bonds Payable

Additional information on the City’s long-term debt can be found in Note 17 on pages 84 to 93 of this report.

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Net pension liability. The following is an analysis of the City’s and our component units’ net pension liability at the end of the current and prior fiscal years. The majority (approx-imately $______) of this increase will increase pension expense over the next four years and therefore reduce unrestricted net position.

6/30/17 6/30/16 Change

Governmental Activities:City $ 53,984,047 $ 40,988,644 $ 12,995,403

Business-Type Activities:Electric 16,198,638 12,674,005 3,524,633 Airport 2,631,042 2,169,468 461,574 Telecom 1,006,801 1,124,029 (117,228) Wastewater 1,256,143 856,352 399,791 Water 1,712,439 1,169,736 542,703

Subtotal bussiness-type 22,805,063 17,993,590 4,811,473

Component Unit:School District 12,782,205 9,182,200 3,600,005

Total $ 89,571,315 $ 68,164,434 $ 21,406,881

Net Pension Liability

G. ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES

Mayor’s Overview Management Discussion and FY 18 Budget Summary With the City’s finances restored to a strong position, this budget will advance important community goals while also making prudent and strategic investments now that are designed to help reduce future taxpayer costs. The total budget reflects feedback from four work sessions in May with the City Council, and includes over $200 million in total annual expenditures. This memo summarizes the highlights of the FY18 budget. Summary: The FY18 budget makes strategic investments in public safety, efforts to support the most vulnerable - Burlington’s children, sustainability, infrastructure, technology and organizational efficiency measures, which were all achieved without a General City Tax increase. Highlights of the budget include:

Hiring 3.5 new police officers, the first increase in sworn officers in 15 years.

Full-year funding for 3 new firefighters, the first increase in more than 15 years.

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Dramatically increased funding in streets, sidewalks, water lines, the Bike Path, and other capital investments as a result of last November’s overwhelming voter approval of the Sustainable Infrastructure Plan.

A major investment in early childhood education with a new $500,000 initiative to expand high-quality infant and toddler child care options within the City.

Matching funds for a year-round warming shelter pilot that will build on the success of the winter warming shelter in improving the health of some of our most vulner-able residents while also reducing taxpayer costs.

The creation of a new $500,000 Green Revolving Loan Fund to expand and improve energy efficiency efforts across City properties.

Funding for the purchase of Computer Assisted Dispatch software that will allow the City to modernize and improve its emergency response efforts.

Funding for much needed improvement in the City’s permitting and code enforce-ment processes and the technology that supports them.

Maintaining of the additional $175,000 funding for Housing Trust Fund.

Increasing financial support for Howard Center Street Outreach Program.

Funding for four evaluations focused on how to provide better service at reduced cost. These are: evaluation of City fleet (vehicles), consolidation of two fire stations, capital asset management, and analysis of general fund structure.

These and other investments have been achieved while maintaining the General City Tax reduction implemented last fiscal year, keeping the cost to the City of the pension system flat for the third year in a row as was negotiated in the last round of collective bargaining, an increase of over $800,000 in General Fund contributions towards health insurance and a 2.75% COLA increase for City employees. With all of this, and even with the expected increase in the debt service tax to pay for the first year of the voter-approved Sustainable Infrastructure Plan, the total municipal tax in FY18 will be only .18% greater (less than 2 tenths of a penny) than the FY15 rate. Early Achievement of the Unassigned Fund Balance Policy Target Has Created New Opportunities The FY16 audit released at the beginning of 2017 confirmed that the City had achieved its Unassigned Fund Balance goal of $6 million (approximately 10 percent of the City’s General Fund budget) 2 years ahead of the schedule we had set when Fund Balance Policy was created and adopted by the Administration and City Council in 2015. Securing Continued Benefits of Retirement System Reforms The work completed by representatives of the City’s four bargaining units, the City Council, and the City Administration as part of the Retirement Committee in 2014 and 2015, along-side the methodical work of the City’s negotiating team, has helped place our retirement system on more stable footing for future years and helped control taxpayer costs. Even with the previous year’s downturn in the market, with a corresponding reduction in pension assets and addressed by the contractual “triggers’ that on a one-time basis increased employee

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contribution due to the downturn, these efforts are a major reason the City’s total FY18 pension cost will remain at the same level as the prior year for the third year in a row. Proactive Investments in Public Safety Burlington remains one of the safest cities in America. However, like cities across the country, we are facing major law enforcement and public health challenges in the form of a growing opioid crisis, an increase in the number of requests for service related to mental health issues, and public demands for changes in the way we police. Our public safety depart-ments have performed bravely and effectively and built the public’s trust amidst these rising challenges, utilizing innovative strategies, data, transparency, and unwavering commitment. However, as the challenges continue to grow, it is time to get our police officers and firefighters more help. The FY18 budget does that in numerous ways:

Adding 3.5 new police officers in FY18 and an additional 1.5 officers in FY19, bringing the Burlington Police Department to a total of 105 sworn officers. The increase in the number of police is meant to support the Department’s community policing orientation, allowing our officers to spend more time getting to know the neighborhoods they patrol and allowing us to maintain the new emphasis on foot patrols.

Hiring 3 new firefighters, the first increase in more than 15 years that will signifi-cantly be paid for from reduced overtime costs. The budget also includes funds to expand the City’s recently initiated Paramedicine program that is enabling the City to provide a higher standard of care during emergencies than we were previously able to achieve. And, the City’s Capital Program continues to upgrade the Fire Depart-ment’s vehicles. In addition, we add a new dispatch software going in.

The FY18 Budget Continues Expanded Infrastructure Investment The City has bonded for $8 million to support new sidewalk and street repairs and $3 million to help reline our aging water pipes. This additional investment is focused on:

Enhanced sidewalk funding. In FY18 we will triple the historic level of sidewalk replacement as we work to address chronic underfunding of this key infrastructure.

$3 million for continuing the expansion and rebuilding of the Bike Path from North Beach all the way to the northern City limits in Colchester – a 3‐mile stretch with work commencing immediately following the Council’s June 5 approval of the contract.

Substantial investments in City facilities, especially in critical deferred mainte-nance items identified in our recent independent study of City facilities.

Conclusion: the FY18 Budget represents continued progress in numerous areas that the Administration and the City Council have worked on for years, includes steps to con-tinue the City’s efforts to appropriately reduce operating costs while maintain/increase its services, and creates new opportunities created by the joint successes in recent years.

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REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City of Burlington’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information can be found on the City’s web page at www.burlingtonvt.gov or should be addressed to:

Clerk/Treasurer Office City Hall

149 Church Street Burlington, Vermont 05401

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Governmental Business-TypeActivities Activities Total

ASSETS AND DEFERRED OUTFLOWS OF RESOURCES

ASSETS:Current:

Cash and cash equivalents $ 31,607,632 $ 28,857,081 $ 60,464,713 $ 16,683,683 Retricted cash - 367,500 367,500 - Investments 8,977,312 995,942 9,973,254 197,872 Restricted investments - 606,206 606,206 - Receivables, net of allowance for uncollectibles:

Property taxes 1,873,130 - 1,873,130 - User fees - 11,726,403 11,726,403 - Departmental and other 2,804,084 - 2,804,084 246,946 Intergovernmental 1,694,139 5,120,479 6,814,618 1,283,434 Passenger facility charges - 402,711 402,711 - Loan 82,084 72,136 154,220 - Capital lease 20,659 - 20,659 -

Inventory 500,416 5,564,812 6,065,228 38,224 Prepaid expenses 246,671 118,704 365,375 18,323 Other assets 64,568 1,674,638 1,739,206 -

Total current assets 47,870,695 55,506,612 103,377,307 18,468,482

Noncurrent:Restricted cash - 13,392,442 13,392,442 - Restricted investments - 9,278,501 9,278,501 - Receivables, net of current portion:

Loan 5,418,204 661,948 6,080,152 - Capital lease 712,779 712,779 - Accrued interest 1,270,411 - 1,270,411 -

Investment in associated companies - 29,002,866 29,002,866 - Regulatory assets and other prepaid charges - 2,429,340 2,429,340 - Capital assets:

Land and construction in progress 26,368,761 66,856,477 93,225,238 2,251,677 Intangible asset - 5,100,000 5,100,000 - Other capital assets, net of

accumulated depreciation 114,024,315 236,491,679 350,515,994 40,136,309

Total noncurrent assets 147,794,470 363,213,253 511,007,723 42,387,986

TOTAL ASSETS 195,665,165 418,719,865 614,385,030 60,856,468

DEFERRED OUTFLOWS OF RESOURCES:Related to pensions 22,520,031 9,775,905 32,295,936 4,418,366 Deferred amount on refunding 415,069 481,364 896,433 -

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES $ 218,600,265 $ 428,977,134 $ 647,577,399 $ 65,274,834

PresentedComponent

Unit


STATEMENT OF NET POSITION

JUNE 30, 2017

Primary Government Discretely

(continued)

35

(continued)

Governmental Business-TypeActivities Activities Total

PresentedComponent

Unit

Primary Government Discretely

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND NET POSITION

LIABILITIES:Current:

Accounts payable $ 4,235,206 $ 8,200,488 $ 12,435,694 $ 1,799,018 Accrued payroll and benefits payable 1,156,948 151,408 1,308,356 - Accrued liabilities 62,594 - 62,594 1,392,434 Accrued interest payable 309,919 797,141 1,107,060 - Unearned revenue 791,385 1,900,977 2,692,362 - Note payable - 503,158 503,158 - Line of credit 2,106,123 1,865,191 3,971,314 - Other liabilities 350,938 3,271,856 3,622,794 - Payable from restricted assets - 606,206 606,206 - Current portion of long-term liabilities:

General obligation bonds 1,886,565 2,675,000 4,561,565 1,434,184 Revenue bonds - 4,586,124 4,586,124 - Other debt 2,320,355 - 2,320,355 - State revolving loan - 167,321 167,321 - Capital lease 527,824 482,988 1,010,812 - Compensated absences 223,436 - 223,436 - Insurance reserves 929,364 - 929,364 -

14,900,657 25,207,858 40,108,515 4,625,636

Noncurrent, net of current portion:General obligation bonds 35,826,652 47,560,593 83,387,245 28,074,432 Revenue bonds - 75,874,363 75,874,363 - State revolving loan - 1,914,855 1,914,855 - Other debt 15,161,850 - 15,161,850 - Net pension liability 53,984,047 22,805,063 76,789,110 12,782,205 Net OPEB obligation 1,275,947 682,835 1,958,782 2,990,863 Capital lease 1,773,224 6,836,404 8,609,628 - Compensated absences 2,010,921 1,195,152 3,206,073 2,199,269 Insurance reserves 1,143,394 - 1,143,394 - Regulatory liabilities - 4,843,254 4,843,254 - Other noncurrent liabilities - 713,037 713,037 -

Total noncurrent liabilities 111,176,035 162,425,556 273,601,591 46,046,769

TOTAL LIABILITIES 126,076,692 187,633,414 313,710,106 50,672,405

DEFERRED INFLOWS OF RESOURCES:Related to pensions 3,188,622 569,262 3,757,884 793,789

NET POSITION:Net investment in capital assets 98,441,690 188,464,010 286,905,700 8,609,626 Restricted externally or constitutionally for:

Education - - - 3,467,619 Community development 8,776,547 - 8,776,547 - Debt service/renewal and replacements/capital projects - 14,150,479 14,150,479 - Contingency reserve - 1,440,242 1,440,242 - Revenue fund - 1,356,987 1,356,987 - Deposits with bond trustees - 5,723,235 5,723,235 - Permanent funds:

Nonspendable 909,230 - 909,230 - Spendable 380,061 - 380,061 -

Restricted by enabling legislation 3,020,857 - 3,020,857 - Unrestricted (22,193,434) 29,639,505 7,446,071 1,731,395

TOTAL NET POSITION 89,334,951 240,774,458 330,109,409 13,808,640

TOTAL LIABILITIES, DEFERRED INFLOWS OFRESOURCES AND NET POSITION $ 218,600,265 $ 428,977,134 $ 647,577,399 $ 65,274,834

The accompanying notes are an integral part of these financial statements.

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Operating CapitalCharges for Grants and Grants and Net (Expenses)

Expenses Services Contributions Contributions Revenue

Primary Government:Governmental Activities:

General government $ 12,334,976 $ 5,204,079 $ 269,596 $ - $ (6,861,301) Public safety 29,094,586 5,737,200 112,910 12,481 (23,231,995) Public works 16,128,749 8,448,998 403,715 2,603,405 (4,672,631) Culture and recreation 14,185,639 4,068,846 208,701 617,061 (9,291,031) Community development 4,942,418 315,042 3,115,430 - (1,511,946) Interest on long-term debt 2,147,709 - - - (2,147,709)

Total Governmental Activities 78,834,077 23,774,165 4,110,352 3,232,947 (47,716,613)

Business-Type Activities:Electric 63,449,764 60,223,551 - 531,453 (2,694,760) Airport 20,368,534 18,589,325 177,238 10,434,029 8,832,058 Nonmajor 22,126,474 24,582,213 41,146 60,000 2,556,885

Total Business-Type Activities 105,944,772 103,395,089 218,384 11,025,482 8,694,183

Total Primary Government $ 184,778,849 $ 127,169,254 $ 4,328,736 $ 14,258,429 (39,022,430)

Discretely Presented Component Unit:Burlington School District $ 91,496,404 $ 694,049 $ 28,637,897 $ - $ (62,164,458)

Total component units $ 91,496,404 $ 694,049 $ 28,637,897 $ - $ (62,164,458)

The accompanying notes are an integral part of these financial statements. (continued)


STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2017

Program Revenues

37

(continued)

DiscretelyBusiness- Presented

Governmental Type ComponentActivities Activities Total Unit

Change in Net PositionNet (expenses) revenue from previous page $ (47,716,613) $ 8,694,183 $ (39,022,430) $ (62,164,458)

General Revenues:Property taxes 33,253,448 - 33,253,448 - Gross receipts taxes 4,034,408 - 4,034,408 - Local option sales tax 2,329,007 - 2,329,007 - Payments in lieu of taxes 5,248,985 - 5,248,985 - Franchise fees 2,161,617 - 2,161,617 - Impact fees 346,411 - 346,411 - Interest and penalties on delinquent taxes 303,370 - 303,370 - General state support - - - 57,685,817 Unrestricted investment earnings 249,012 158,415 407,427 615,906 Dividends from associated companies - 3,516,718 3,516,718 - Other revenues 1,698,196 513,337 2,211,533 4,060,576

Additions to permanent funds 3,846 - 3,846 - Special item - impairment of capital asset (2,154,349) - (2,154,349) -

Total general revenues, additions to permanent funds, and special items 47,473,951 4,188,470 51,662,421 62,362,299

Change in Net Position (242,662) 12,882,653 12,639,991 197,841

Net Position:Beginning of year, as restated 89,577,613 227,891,805 317,469,418 13,610,799

End of year $ 89,334,951 $ 240,774,458 $ 330,109,409 $ 13,808,640

Primary Government


STATEMENT OF ACTIVITIES


38

Nonmajor TotalGovernmental

General Funds Funds

Cash and cash equivalents $ 7,412,020 $ 24,195,613 $ 31,607,633 Investments 7,726,532 1,250,780 8,977,312 Receivables, net of allowance for uncollectibles:

Property and other taxes 1,873,130 - 1,873,130 Departmental and other 2,438,630 365,454 2,804,084 Intergovernmental - 1,694,139 1,694,139 Loans - 5,500,288 5,500,288 Capital lease 733,438 733,438 Accrued interest - 1,270,411 1,270,411

Due from other funds 94,856 - 94,856 Advances to other funds 1,383,664 221,588 1,605,252 Inventory 197,088 303,329 500,417 Prepaid expenditures 244,528 - 244,528 Other current assets 64,444 2,266 66,710

TOTAL ASSETS $ 21,434,892 $ 35,537,306 $ 56,972,198

Liabilities:Accounts payable $ 1,299,505 $ 2,935,701 $ 4,235,206 Intergovernmental payable - 276,372 276,372 Accrued payroll and benefits payable 1,064,527 92,422 1,156,949 Accrued liabilities 11,221 51,372 62,593 Unearned revenue 569,049 222,334 791,383 Line of credit - 2,106,123 2,106,123 Due to other funds - 94,856 94,856 Advances from other funds - 1,605,252 1,605,252 Insurance reserve 929,364 - 929,364 Other liabilities 14,973 100,953 115,926

TOTAL LIABILITIES 3,888,639 7,485,385 11,374,024

Deferred Inflows of ResourcesUnavailable revenues 1,922,508 8,572,232 10,494,740

Fund Balances:Nonspendable 1,825,280 1,212,559 3,037,839 Restricted 560,372 17,967,801 18,528,173 Committed 1,209,754 4,349,883 5,559,637 Assigned 3,619,252 - 3,619,252 Unassigned 8,409,087 (4,050,554) 4,358,533

TOTAL FUND BALANCES 15,623,745 19,479,689 35,103,434

$ 21,434,892 $ 35,537,306 $ 56,972,198


OF RESOURCES AND FUND BALANCES


ASSETS


BALANCE SHEET

JUNE 30, 2017

GOVERNMENTAL FUNDS

Governmental

RESOURCES AND FUND BALANCES

TOTAL LIABILITIES, DEFERRED INFLOWS

39

Total governmental fund balances $ 35,103,434

Capital assets used in governmental activities are not financialresources and, therefore, are not reported in the funds. 140,393,076

Revenues are reported on the accrual basis of accountingand are not deferred until collection. 10,494,740

Deferred outflows of resources related to pension resulting fromcontributions subsequent to the measurement date will be recognizedas an increase in pension expense in the year ended June 30, 2017. 5,699,821

Deferred outflows of resources related to pension resulting fromchanges in proportional share of contributions, difference betweenexpected and actual pension experience and investment earningswhich will be recognized as an increase in pension expense in theyears ended June 30, 2017 through June 30, 2020. 16,820,210

Deferred debt expense for refunding is net of amortization on the statement of net position, whereas all debt expense is reported 415,069 when paid in the governmental funds.

Deferred inflows of resources related to pension resulting fromchanges in proportion and differences between employer contributions and proportionate share of contributions will be recognized as a reductionof pension expense in the years ending June 30, 2017 throughJune 30, 2019. (3,188,622)

Long-term liabilities, including bonds and other debt payable and net pension obligation, are not due and payable in the current period and, therefore, are not reported in the governmental funds.

General obligation bonds and other debt payable, net of related unamortized premiums (55,195,422)

Capital lease payable (2,301,048)

Compensated absenses payable (2,234,357)

Insurance reserves, long-term (1,143,394)

Net other post-employment benefits payable (1,275,947)

Net pension obligation (53,984,047)

Accrued interest on long-term obligations (309,919)

Other 41,357

Net position of governmental activities $ 89,334,951



RECONCILIATION OF TOTAL GOVERNMENTAL FUND

JUNE 30, 2017

BALANCES TO NET POSITION OF GOVERNMENTALACTIVITIES IN THE STATEMENT OF NET POSITION

40

Nonmajor TotalGovernmental

General Funds FundsRevenues:

Taxes $ 33,299,788 $ 6,481,730 $ 39,781,518 Payments in lieu of taxes 5,248,985 - 5,248,985 Licenses and permits 5,444,412 126,295 5,570,707 Intergovernmental 891,752 5,965,931 6,857,683 Charges for services 14,655,823 6,434,942 21,090,765 Contributions 579,611 793,889 1,373,500 Investment income 233,787 15,226 249,013 Loan repayments - 57,357 57,357 Other 284,262 301,537 585,799

Total Revenues 60,638,420 20,176,907 80,815,327

Expenditures:Current:

General government 12,151,374 51,000 12,202,374 Public safety 26,493,268 - 26,493,268 Public works 5,802,487 6,189,321 11,991,808 Culture and recreation 10,577,570 664,339 11,241,909 Community development 709,717 3,926,472 4,636,189

Capital outlay - 11,062,639 11,062,639 Debt service:

Principal 2,232,229 2,313,331 4,545,560 Interest and bond issue costs 1,425,429 668,935 2,094,364

Total Expenditures 59,392,074 24,876,037 84,268,111

Excess (deficiency) of revenuesover (under) expenditures 1,246,346 (4,699,130) (3,452,784)

Other Financing Sources (Uses):Issuance of bonds and loans - 10,966,360 10,966,360 Issuance of refunding debt 2,545,000 - 2,545,000 Payment to refunding escrow (2,837,850) - (2,837,850) Bond premium 1,067,582 - 1,067,582 Issuance of capital lease 1,699,383 - 1,699,383 Sale of capital assets 949,986 - 949,986 Transfers in 13,617 2,790,471 2,804,088 Transfers out (1,060,397) (1,743,691) (2,804,088)

Total Other Financing Sources (Uses) 2,377,321 12,013,140 14,390,461

Net change in fund balances 3,623,667 7,314,010 10,937,677

Fund Balances, at Beginning of Year, as restated 12,000,078 12,165,679 24,165,757

Fund Balances, at End of Year $ 15,623,745 $ 19,479,689 $ 35,103,434



GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES


Governmental

41

$ 10,937,677

Governmental funds report capital outlays as expenditures. However,in the Statement of Activities the cost of those assets is allocatedover their estimated useful lives and reported as depreciation expense:

Capital outlay purchases 10,520,418

Depreciation (6,562,791)

Loss on disposal of capital assets (48,969)

Impairment of capital asset (2,154,349)

Revenues in the Statement of Activities that do not provide currentfinancial resources are fully deferred in the Statement of Revenues,Expenditures and Changes in Fund Balances. Therefore, therecognition of revenue for various types of accounts receivable (i.e., realestate and personal property, etc.) differ between the two statements. This amount represents the net change in deferred inflows. (1,185,805)

The issuance of long-term debt (e.g., bonds and leases) providescurrent financial resources to governmental funds, while therepayment of the principal of long-term debt consumes the financialresources of governmental funds. Neither transaction, however, has any effect on net position:

Issuance of debt (13,511,360)

Issuance of capital leases (1,699,383)

Repayments of debt and capital leases 4,545,560

Defeasance of debt refunding 2,685,000

Bond premium activity (896,560)

Deferred amount on refunding activity 95,995

In the statement of activities, interest is accrued on outstanding long-term debt, whereas in governmental funds interest is not reported until due. (53,346)

Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore, are

Change in net pension obligation (12,995,403)

Change in pension related deferred outflows 11,383,732

Change in pension related deferred inflows (1,418,385)

Change in compensated absences (205,328)

Change in net OPEB obligation (195,507)

Change in insurance reserves 516,142

$ (242,662)


CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES

NET CHANGES IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS

not reported as expenditures in the governmental funds.


RECONCILIATION OF THE STATEMENT OF REVENUES


EXPENDITURES, AND CHANGES IN FUND BALANCES OFGOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES

42

AdjustedOriginal Final Actual Variance WithBudget Budget Amounts Final Budget

Revenues and other sources:Taxes and special assessments $ 31,278,078 $ 31,278,078 $ 30,970,781 $ (307,297) Local option sales tax 2,181,438 2,181,438 2,329,007 147,569 Payments in lieu of taxes 5,194,978 5,194,978 5,248,985 54,007 Licenses and permits 4,125,200 4,125,200 5,444,412 1,319,212 Intergovernmental 716,021 827,824 891,752 63,928 Charges for services 14,592,886 14,854,094 14,655,823 (198,271) Investment income 90,000 90,000 233,787 143,787 Contributions and donations 651,700 680,087 579,611 (100,476) Transfers in 657,012 652,012 13,617 (638,395) Other 488,200 514,188 284,262 (229,926) Sale of land 200,000 200,000 949,985 749,985 Bond premium - - 746,987 746,987 Use of fund balance 914,148 914,148 - (914,148)

Total Revenues and Other Sources 61,089,661 61,512,047 62,349,009 836,962

Expenditures and other uses:Nondepartmental 2,691,584 2,643,701 2,907,130 (263,429) City council 2,528,717 2,479,217 2,388,083 91,134 Mayor 398,326 398,326 386,275 12,051 Clerk treasurer 2,665,812 2,670,832 2,530,316 140,516 City attorney 1,141,768 1,141,768 1,053,785 87,983 Planning and zoning 846,263 846,263 794,238 52,025 City assessor 308,289 308,289 277,495 30,794 Human resources 700,890 700,890 664,232 36,658 Information technology 1,398,879 1,398,879 900,799 498,080 Fire 9,827,184 9,924,634 9,913,659 10,975 Police 15,650,466 15,903,537 15,555,001 348,536 Code enforcement 1,091,412 1,091,412 1,024,608 66,804 Public works 4,674,952 4,327,352 3,977,442 349,910 Library 2,152,283 2,161,283 2,089,301 71,982 Parks and recreation 6,891,811 7,071,887 6,737,279 334,608 Burlington city arts 1,937,055 1,946,055 1,750,990 195,065 Community and economic development 932,811 1,026,020 709,717 316,303 Debt service 3,763,053 3,503,005 3,755,575 (252,570) Transfers 474,480 993,613 1,060,397 (66,784)

Total Expenditures and Other Uses 60,076,035 60,536,963 58,476,322 2,060,641

Excess (deficiency) of revenues and other sources over expenditures and other uses $ 1,013,626 $ 975,084 $ 3,872,687 $ 2,897,603


Budgeted Amounts


GENERAL FUND

STATEMENT OF REVENUES AND OTHER SOURCES,AND EXPENDITURES AND OTHER USES - BUDGET AND ACTUAL


43

NonmajorEnterprise

Electric Airport Funds Total

OUTFLOWS OF RESOURCES

Current:Cash and cash equivalents $ 13,053,826 $ 5,763,681 $ 10,039,574 $ 28,857,081 Restricted cash - - 367,500 367,500 Investments - - 995,942 995,942 Restricted investments 606,206 - - 606,206 Receivables, net of allowance for uncollectibles:

User fees 6,819,675 1,229,358 3,677,370 11,726,403 Intergovernmental - 4,560,110 560,369 5,120,479 Passenger facility charges - 402,711 - 402,711 Loan - 72,136 - 72,136

Inventory 4,768,298 303,847 492,667 5,564,812 Prepaid expenses - 8,119 110,585 118,704 Other current assets 1,213,438 455,000 6,200 1,674,638

Total current assets 26,461,443 12,794,962 16,250,207 55,506,612

Noncurrent:Restricted cash - 10,595,213 2,797,229 13,392,442 Restricted investments 5,723,235 3,555,266 - 9,278,501 Loan receivable, net of current portion - 661,948 - 661,948 Investment in associated companies 29,002,866 - - 29,002,866 Regulatory assets and other prepaid charges 2,429,340 - - 2,429,340 Capital assets:

Land and construction in progress 4,098,957 61,664,518 1,093,002 66,856,477 Intangible asset - - 5,100,000 5,100,000 Capital assets, net of accumulated depreciation 95,708,049 98,578,749 42,204,881 236,491,679

Total noncurrent assets 136,962,447 175,055,694 51,195,112 363,213,253

TOTAL ASSETS 163,423,890 187,850,656 67,445,319 418,719,865

DEFERRED OUTFLOWS OF RESOURCESRelated to pensions 6,104,933 1,479,949 2,191,023 9,775,905 Deferred amount on refunding 481,364 - - 481,364

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES $ 170,010,187 $ 189,330,605 $ 69,636,342 $ 428,977,134

ASSETS AND DEFERRED

ASSETS:


Business-Type ActivitiesEnterprise Funds

PROPRIETARY FUNDS


JUNE 30, 2017

(continued)

44

(continued)

NonmajorEnterprise


Business-Type ActivitiesEnterprise Funds


RESOURCES AND NET POSITION

LIABILITIES:Current:

Accounts payable $ 2,951,053 $ 3,573,457 $ 1,675,978 $ 8,200,488 Accrued payroll and benefits payable - 78,298 73,110 151,408 Accrued interest - 797,141 - 797,141 Unearned revenue - 1,385,224 515,753 1,900,977 Note payable - - 503,158 503,158 Line of credit - 1,865,191 - 1,865,191 Other current liabilities 1,952,406 1,405 1,318,045 3,271,856 Payable from restricted assets:

Deposits with bond trustees 606,206 - - 606,206 Current portion of long-term liabilities:

General obligation bonds payable 2,675,000 - - 2,675,000 Revenue bonds payable 1,475,000 2,283,793 827,331 4,586,124 State revolving loan - - 167,321 167,321 Capital leases payable - 295,436 187,552 482,988

Total current liabilities 9,659,665 10,279,945 5,268,248 25,207,858

Noncurrent, net of current portion:General obligation bonds payable 47,560,593 - - 47,560,593 Revenue bonds payable 26,118,703 34,075,822 15,679,838 75,874,363 State revolving loan - - 1,914,855 1,914,855 Net pension liability 16,198,638 2,631,042 3,975,383 22,805,063 Net OPEB obligation 261,213 139,084 282,538 682,835 Capital leases payable - 1,318,609 5,517,795 6,836,404 Compensated absences payable 606,260 230,462 358,430 1,195,152 Regulatory liabilities 4,843,254 - - 4,843,254 Other noncurrent liabilities 713,037 - - 713,037

Total noncurrent liabilities 96,301,698 38,395,019 27,728,839 162,425,556

TOTAL LIABILITIES 105,961,363 48,674,964 32,997,087 187,633,414

DEFERRED INFLOWS OF RESOURCESRelated to pensions - 196,858 372,404 569,262

NET POSITION:Net investment in capital assets 40,608,237 120,404,417 27,451,356 188,464,010 Restricted:

For debt service/renewal and replacements/capital projects - 14,150,479 - 14,150,479

For contingency reserve - - 1,440,242 1,440,242 For revenue fund - - 1,356,987 1,356,987 Deposits with bond trustees 5,723,235 - - 5,723,235

Unrestricted 17,717,352 5,903,887 6,018,266 29,639,505

TOTAL NET POSITION 64,048,824 140,458,783 36,266,851 240,774,458

OF RESOURCES AND NET POSITION $ 170,010,187 $ 189,330,605 $ 69,636,342 $ 428,977,134


TOTAL LIABILITIES, DEFERRED INFLOWS

45

NonmajorEnterprise

Electric Airport Funds TotalOperating Revenues:

Charges for services $ 47,439,527 $ 16,211,216 $ 24,196,642 $ 87,847,385 Intergovernmental - 177,238 41,146 218,384 Miscellaneous 12,784,024 - 385,571 13,169,595

Total Operating Revenues 60,223,551 16,388,454 24,623,359 101,235,364

Operating Expenses:Personnel - 4,594,148 6,402,406 10,996,554 Nonpersonnel - 7,955,944 9,406,046 17,361,990 Electric department 51,065,240 - - 51,065,240 Depreciation and amortization 5,914,766 6,158,871 3,202,994 15,276,631 Payments in lieu of taxes - - 1,457,416 1,457,416

Total Operating Expenses 56,980,006 18,708,963 20,468,862 96,157,831

Operating Income (Loss) 3,243,545 (2,320,509) 4,154,497 5,077,533

Nonoperating Revenues (Expenses):Dividends from associated companies 3,516,718 - - 3,516,718 Passenger facility charges - 2,378,109 - 2,378,109 Investment income 126,468 24,140 7,807 158,415 Stormwater design - - (503,158) (503,158) Other income/expense - net 155,213 106,071 68,898 330,182 Interest expense (3,100,176) (1,659,571) (987,534) (5,747,281) Restructuring fees - - (166,920) (166,920) Amortization of bond premium - 183,155 - 183,155 Gain/loss on disposal of capital assets (1,107,797) - - (1,107,797)

Total Nonoperating Revenues (Expenses) (409,574) 1,031,904 (1,580,907) (958,577)

2,833,971 (1,288,605) 2,573,590 4,118,956

Capital contributions 531,453 10,434,029 60,000 11,025,482 Payment in lieu of taxes (2,261,785) - - (2,261,785)

Change in Net Position 1,103,639 9,145,424 2,633,590 12,882,653

Net Position at Beginning of Year 62,945,185 131,313,359 33,633,261 227,891,805

Net Position at End of Year $ 64,048,824 $ 140,458,783 $ 36,266,851 $ 240,774,458


Income Before Contributions and Other


PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION


Enterprise FundsBusiness-Type Activities

46

NonmajorEnterprise


Cash Flows From Operating Activities:Receipts from customers and users $ 47,453,036 $ 16,434,689 $ 24,651,774 $ 88,539,499 Receipts of operating grants - 177,238 41,146 218,384 Payments from electric department (49,061,009) - - (49,061,009) Payments to suppliers - (6,528,477) (8,023,999) (14,552,476) Payments for wages and benefits - (4,082,725) (6,492,161) (10,574,886) Payment in lieu of taxes - - (1,457,416) (1,457,416) Payments for other expenses - (288,706) - (288,706) Other receipts 12,666,338 324,958 59,564 13,050,860

Net Cash Provided by Operating Activities 11,058,365 6,036,977 8,778,908 25,874,250

Cash Flows From Noncapital Financing Activities:Payment in lieu of taxes (2,275,586) - - (2,275,586) Receipt from loan receivable - 70,007 - 70,007 Interest paid on cash deficit to general fund - (292) - (292) Design costs financed by revolving loan - - (503,158) (503,158) Restructuring fees - - (166,920) (166,920)

Net Cash Provided/(Used) by Noncapital Financing Activities (2,275,586) 69,715 (670,078) (2,875,949)

Cash Flows From Capital and Related Financing Activities:Acquisition and construction of capital assets (8,076,376) (11,394,487) (3,655,200) (23,126,063) Proceeds from bonds and notes payable 20,465,000 - 3,250,000 23,715,000 Proceeds from premium 134,209 - 451,652 585,861 Deposit with escrow agent for purchase of land - (455,000) - (455,000) Proceeds from sale of capital assets 17,925 - - 17,925 Capital grants/contributions 531,453 8,508,617 60,000 9,100,070 Passenger facility charges - 2,287,878 - 2,287,878 Drawdowns on line of credit - 5,307,921 - 5,307,921 Repayment of line of credit - (4,089,332) - (4,089,332) Principal paid on:

General obligation bonds (20,665,000) - - (20,665,000) Revenue bonds - (2,015,000) (751,045) (2,766,045) State revolving loans - - (155,721) (155,721) Capital lease obligations - (285,965) (264,654) (550,619)

Interest paid on outstanding debt, including issue costs (3,121,499) (1,699,899) (987,533) (5,808,931)

Net Cash Used by Capital and Related Financing Activities (10,714,288) (3,835,267) (2,052,501) (16,602,056)

Cash Flows From Investing Activities:

Net (additions)/reductions to restricted cash and investments (303,777) (802,962) (2,062,613) (3,169,352)

Purchase of investment in associated companies (3,012,310) - - (3,012,310) Receipt of interest & dividends 3,520,494 24,139 7,809 3,552,442

Net Cash Provided/(Used) by Investing Activities 204,407 (778,823) (2,054,804) (2,629,220)

Net Increase in Cash (1,727,102) 1,492,602 4,001,525 3,767,025 Cash and cash equivalents at beginning of year 14,780,928 4,271,079 6,038,049 25,090,056 Cash and cash equivalents at end of year $ 13,053,826 $ 5,763,681 $ 10,039,574 $ 28,857,081


PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS


(continued)

47

(continued)

NonmajorEnterprise


Adjustments to Reconcile Operating Income/(Loss) to Net Cash Provided by (used ford) Operating Activities:

Operating income/(loss) $ 3,243,545 $ (2,320,509) $ 4,154,497 $ 5,077,533 Depreciation and amortization 6,169,865 6,158,871 3,202,994 15,531,730 Other operating revenues 119,994 106,069 59,564 285,627 Changes in assets, liabilities, and deferred outflows/inflows:

(Increase)/decrease in receivables (458,790) 153,389 9,221 (296,180) (Increase)/decrease in unbilled revenues 91,372 - - 91,372 (Increase)/decrease in inventory 248,843 (56,302) 330,267 522,808 (Increase)/decrease in prepaids - (8,119) - (8,119) (Increase)/decrease in deferred outflows - related to pensions (2,420,517) (201,116) (571,953) (3,193,586) Increase/(decrease) in accounts payable 419,206 1,338,224 690,699 2,448,129 Increase/(decrease) in customer deposits - - 14,115 14,115 Increase/(decrease) in accrued payroll and benefits - 16,428 22,551 38,979 Increase/(decrease) in accrued liabilities - - 391,549 391,549 Increase/(decrease) in deferred charges 128,512 - 46,225 174,737

3,524,633 461,574 825,266 4,811,473 Increase/(decrease) in other post employment benefits

liability - - 15,600 15,600 Increase/(decrease) in compensated absences - 37,679 37,109 74,788 Increase/(decrease) in unearned revenue - 267 - 267 Increase/(decrease) in retainage payable - 152,259 - 152,259 Increase/(decrease) in other operating assets/liabilities (8,298) 1,405 (30,468) (37,361) Increase/(decrease) in deferred inflows - related to pensions - 196,858 372,404 569,262

Capitalized labor - - (790,732) (790,732)

Net Cash Provided by Operating Activities $ 11,058,365 $ 6,036,977 $ 8,778,908 $ 25,874,250

Statement of noncash transactions:Vehicles acquired under capital lease financing $ - $ 1,252,900 $ - $ 1,252,900


Increase/(decrease) in net pension liability

48

PrivatePension Purpose

Trust TrustFund Funds

Cash and cash equivalents $ 527,128 $ 37,857 Investments:

Equity 125,794,032 - Fixed income 30,657,024 - Real assets 3,098,281 - Realty investors 15,477,947

Due from component unit 28,610 - Deposit 216,000 -

Total Assets 175,799,022 37,857

Current:Accounts payable 128,920 - Accrued liabilities 1,913 - Compensated absences 1,690 - Capital lease payable 28,486 -

Noncurrent, net of current portion:Capital lease payable 166,714 -

Total Liabilities 327,723 -

NET POSITION

Held in trust for:Employees' pension benefits 175,471,299 - Individuals and organizations - 37,857

Total Net Position $ 175,471,299 $ 37,857


ASSETS

LIABILITIES


FIDUCIARY FUNDS

STATEMENT OF FIDUCIARY NET POSITION

JUNE 30, 2017

49

Pension PrivateTrust PurposeFund Trust Funds

Additions:

Contributions:Employer - pension $ 9,219,098 $ - Plan members 2,712,823 -

Total Contributions 11,931,921 -

Investment earnings:Investment income 2,577,351 - Net increase in the fair value of investments 19,581,122 9

Total Investment Earnings 22,158,473 9 Less Investment Expenses (276,013) -

Net Investment Earnings 21,882,460 9

Total Additions 33,814,381 9

Deductions:Benefits - pension 14,770,644 - Administrative expenses 361,811 -

Total deductions 15,132,455 -

Change in net position 18,681,926 9

Net position:Beginning of year 156,789,373 37,848

End of year $ 175,471,299 $ 37,857



FIDUCIARY FUNDS

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION


50


Notes to Financial Statements Incorporated in 1865, the City of Burlington operates under a tripartite system of government with the Mayor serving as Chief Executive, the City Council as the legislative body and the Commissioners as the primary policy makers within their respective departments. The City Charter authorizes the provision for the following services for the residents of the City: general administration, public safety, public works, community development, culture and recreation, utilities and education.

1. Summary of Significant Accounting Policies

The accounting policies adopted by the City of Burlington (the “City”) conform to gen-erally accepted accounting principles (GAAP) as applicable to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing accounting and financial reporting principles. The following is a summary of the more significant accounting policies employed in the preparation of these financial statements.

A. The Financial Reporting Entity

This report includes all of the funds of the City of Burlington, Vermont. The report-ing entity consists of the primary government; organizations for which the primary government is financially accountable; and other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity’s financial statements to be mis-leading or incomplete. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. The primary government is financially accountable if it appoints a voting majority of the organization’s governing body and it is able to impose its will on that organiza-tion or there is a potential for the organization to provide specific financial benefits to or burdens on the primary government. The following entity is reported as a discretely presented component unit, in a separate column in the government-wide financial statements to emphasize that it is legally separate from the because it is fiscally dependent on the City but does not provide services almost entirely to the City:

Burlington School District – the organization’s primary purpose is to carry out the vision of education in the community. The Burlington School District is governed by a separately elected School Board, the legal entity for conducting a system of public education within the geographic area of a school district. The system was created by, and is governed by, state statutes. Members of a board are, therefore, state officers chosen by citizens of a district to represent them and the state in the legislative management of public schools. The Board of School Commissioners has the dual responsibility for implementing statutory require-ments pertaining to public education and local citizens’ desires for educating

51

the community’s youth. For detailed information on the Burlington School District accounts, refer to separately issued financial statements which can be obtained by contacting the School District’s Financial Management at 150 Colchester Avenue, Burlington, Vermont 05401.

B. Basis of Presentation

The accounts of the City are organized and operated on the basis of fund account-ing. A fund is an independent fiscal and accounting entity with a separate set of self-balancing accounts which comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are spent and the means by which spending activities are controlled. The basic financial statements of the City include both government-wide statements and fund financial statements. The focus of the government-wide statements is on reporting the operating results and financial position of the City as a whole and present a longer-term view of the City’s finances. The focus of the fund financial statements is on reporting on the operating results and financial position of the most significant funds of the City and present a shorter-term view of how operations were financed and what remains available for future spending. Government-wide Statements: The statement of net position and the statement of activities display information about the primary government, the City, and its com-ponent unit, the Burlington School District. These statements include the financial activities of the overall City, except for fiduciary activities. The statements are reported using the economic resources measurement focus and the accrual basis of accounting. Eliminations have been made to minimize the double counting of activities between funds. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the City’s governmental activities and for each segment of the City’s business-type activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and con-tributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the City’s funds, including fiduciary funds. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed

52

in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. The proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under this method, reve-nues are recognized when earned and expenses are recorded when liabilities are incurred. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange trans-actions are those in which each party receives and gives up essentially equal values. Operating revenues consists of sales of electricity, rents of electric property, fees to transmit electricity of others, sales of renewable energy credits, operation of other utilities to run generation facilities, rent of airport terminal space and buildings, concessions, commissions, parking receipts, sales of water, wastewater user charges, telephone, cable and internet access, hot lunch sales and other miscellaneous fees for service. Nonoperating revenues result from certain nonexchange transactions or ancillary activities. Non-operating revenues consist of investment earnings, electric services rendered to customers upon their request, passenger facility charges, grant income and building rents from buildings purchased for future expansion. Operating expenses are defined as the ordinary costs and expenses for the opera-tion, maintenance and repairs of the electric plant, airport, water facility, wastewater facility, telecommunications equipment and lines, and hot lunch programs. Operat-ing expenses include the cost of production, purchased power, maintenance of transmission and distribution systems, administrative, and general expenses and depreciation and amortization. Operating expenses do not include the interest on bonds, notes or other evidences or indebtedness and related costs. The City reports on the following major governmental funds:

General Fund - This is the City’s main operating fund. It accounts for all finan-cial resources of the City except those required to be accounted for in another fund.

The City reports on the following major Enterprise funds:

Electric Fund - This fund accounts for the operations of the Burlington Electric Department. For more details on this fund, refer to separately issued financial statements. Airport Fund - This fund accounts for the operations of the Burlington Interna-tional Airport. For more details on this fund, refer to separately issued financial statements.

The fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under this method, revenues are recognized when earned and expenses are recorded when liabilities are incurred.

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The City reports the following fund types:

Pension Trust Fund – This fund accounts for monies contributed by the City and its employees and the income on investments less amounts expended for the pensions of retired City employees. This fund is partially funded by a dedi-cated tax rate which is determined by the City’s Retirement Board, and subject to annual appropriation by the City Council. Private-Purpose Trust Funds – These funds are used to report trust arrangements under which resources are to be used for the benefit of firemen injured in the line of duty, Christmas gifts for servicemen overseas, and Christmas dinners for the destitute. All investment earnings, and in some cases, the principal of these funds may be used to support these activities.

C. Measurement Focus

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Government-wide and proprietary fund financial state-ments are reported using the economic resources measurement focus. This means that all assets and liabilities associated with the operation of these funds (whether current or noncurrent) are included on the balance sheet (or statement of net posi-tion). Equity (i.e., net total assets) is segregated into net investment in capital assets; restricted net position; and unrestricted net position. Operating statements present increases (i.e., revenues) and decreases (i.e., expenses) in net total position. Governmental fund financial statements are reported using the current financial resources measurement focus. This means that only current assets and current lia-bilities are generally reported on their balance sheets. Their reported fund balances (net current assets) are considered a measure of available spendable resources, and are segregated into nonspendable; restricted; committed; assigned and unassigned amounts. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of available spendable resources during a period.

D. Basis of Accounting

Basis of accounting refers to when revenues and expenditures or expenses are rec-ognized in the accounts and reported in the financial statements. Basis of account-ing relates to the timing of the measurements made, regardless of the measurement focus applied. The government-wide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time the liabilities are incurred, regardless of when the related cash flow takes place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include prop-erty taxes, grants, entitlements, and donations. On the accrual basis, revenue from

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property taxes is recognized in the fiscal year for which the taxes are levied. Reve-nue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Governmental funds are reported using the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. “Measurable” means the amount of the transaction can be determined, and “avail-able” means the amount is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers all revenues reported in governmental funds to be available if the revenues are col-lected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, certain compensated absences, self-insured health and dental benefits, reserves for property and casualty and workers’ compensation claims, net pension obligation, post-employment benefits and other long-term liabilities which are recognized when the obligations are expected to be liquidated or are funded with expendable available financial resources. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. Under the terms of grant agreements, the City funds certain programs by a combi-nation of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net positions available to finance the program. It is the City’s policy to first apply cost-reimbursement grant resources to such programs, followed by gen-eral revenues. Expenditure driven grants are recognized as revenue when the qual-ifying expenditures have been incurred and other grant requirements have been met. Recognition of revenues on funds received in connection with loan programs are recognized when loans are awarded and expenses incurred in excess of current grants and program income. An offsetting deferred revenue is recognized for all loans receivable. Loan repayment revenue is recognized as the loans are repaid. The Burlington Electric Department (the Department) is an enterprise fund of the City of Burlington, Vermont (the City). The City has overall financial accountabil-ity for the Department; its Council appoints the Commissioners of the Department which oversee its operations, and the City collateralizes the Department’s general obligation debt. The Department is also subject as to rates, accounting, and other matters, to the regulatory authority of the State of Vermont Public Service Board (VPSB) and the Federal Energy Regulatory Commission (FERC). In accordance with FASB ASC Topic 980, Regulated Operations (and Codified in GASB State-ment 62), the Department records certain assets and liabilities in accordance with the economic effects of the rate making process.

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E. Cash and Short-Term Investments

Cash balances from all funds, except those required to be segregated by law, are combined to form a consolidation of cash. Cash balances are invested to the extent available, and interest earnings are recognized in the general fund. Certain special revenue, proprietary, and fiduciary funds segregate cash, and investment earnings become a part of those funds. Deposits with financial institutions consist primarily of demand deposits, certifi-cates of deposits, and savings accounts. A cash and sweep account is maintained that is available for use by all funds. Each fund’s portion of this pool is reflected on the combined financial statements under the caption “cash and short-term invest-ments”. The interest earnings attributable to each fund type are included under investment income. For purpose of the statement of cash flows, the proprietary funds consider invest-ments with original maturities of three months or less to be short-term investments.

F. Investments

State and local statutes place certain limitations on the nature of deposits and invest-ments available. Deposits in any financial institution may not exceed certain levels within the financial institution. Non-fiduciary fund investments can be made in securities issued by or unconditionally guaranteed by the U.S. Government or agencies that have a maturity of one year or less from the date of purchase and repurchase agreements guaranteed by such securities with maturity dates of no more than 90 days from the date of purchase. Investments for the Trust Funds consist of marketable securities, bonds, and short-term money market investments. Investments are carried at fair value, except for certificates of deposits, which are nonparticipating interest-earning investment con-tracts, and therefore, the City uses the cost-based measurement for these investments.

G. Interfund Receivables and Payables

Transactions between funds that are representative of lending/borrowing arrange-ments outstanding at the end of the fiscal year are referred to as either “due from/to other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate the portion not available for appropriation and not available as expendable financial resources. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances”.

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H. Jointly Owned Facilities

The Burlington Electric Department has recorded its ownership interest in jointly owned facilities as capital assets. The Department’s ownership interest in each of the jointly owned facilities is as follows:

McNeil Station 50.0%Highgate Station 7.7%

The Department is responsible for its proportionate share of the operating expenses of the jointly owned facilities which are billed to the Department on a monthly basis. The associated operating costs allocated to the Department are classified in their respective expense categories in the statement of operations. Separate finan-cial statements are available from the Department for these jointly owned facilities.

I. Investments in Associated Companies

The Electric Department follows the cost method of accounting for its 6.38% Class B common stock, 1.97% Class C common stock and 7.69% Class C preferred stock ownership interest in Vermont Electric Power Company, Inc. (VELCO), and its 5.17% ownership interest in Vermont Transco LLC (Transco). Transco is an affiliated entity of VELCO. VELCO owns and operates a transmission system in the State of Vermont over which bulk power is delivered to all electric utilities in the State of Vermont. Under a Power Transmission Contract with the State of Vermont, VELCO bills all costs, including amortization of its debt and a fixed return on equity, to the State of Vermont and others using the system.

During the year ended June 30, 2017, there was no offer of equity investment from VELCO/Transco.

Schedule of Ownership in Associated Companies:

Velco, Class B Common Stock $ 1,403,800 Velco, Class C Common Stock 39,200 Velco, Class C Preferred Stock 11,196 VT Transco, LLC, A Units 12,121,420 VT Transco, LLC, B Units 15,427,250

$ 29,002,866

J. Inventories

Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when purchased rather than when consumed. No significant inventory balances were on hand in governmental funds.

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K. Capital Assets

City: Capital assets, which include property, plant, equipment, land improvements, build-ings and improvements, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Depreciable capital assets are defined by the government as assets with an estimated useful life of five years or greater, while non-depreciable do not con-sider estimated useful life. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Property, plant, and equipment are depreciated using the straight-line method over the following estimated useful lives:

EstimatedService Life

Land $ - N/AConstruction in Progress - N/ALand Improvements 25,000 30 yearsIntangible asset - 20 yearsBuildings - 25-150 yearsBuilding Improvements 20,000 25-150 yearsVehicles, Machinery, Equipment and Furniture 10,000 5-15 yearsComputer Equipment - Hardware and Software 10,000 5-15 yearsBook Collections 10,000 5 yearsInfrastructure 50,000 10-40 years

CapitalizationThreshold

Capital assets reported in the government-wide and proprietary fund financial state-ments are depreciated in order that the cost of these assets will be charged to expenses over their estimated service lives, generally using the straight-line method of cal-culating depreciation. Electric Department: The Electric Department capital assets are stated at historical cost. Provisions for depreciation of general capital assets are reported using the straight-line method at

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rates based upon the estimated service lives and salvage values of the several classes of property. Depreciation of capital assets of the McNeil Station, the Highgate Converter Facility, and the Winooski One hydroelectric plant, are calculated using the straight-line method. However, a portion of the current depreciation expense is only recoverable through future rates. The difference is included in deferred charges (calculated as the straight-line depreciation expense less the depreciation expense on a sinking fund basis) and will be recovered in future years. See Note 13, Regula-tory Assets and Other Prepaid Charges. Maintenance and repairs of capital assets are charged to maintenance expense. Replacements and betterments are capitalized to capital assets. When assets are retired or otherwise disposed of, the costs are removed from capital assets, and such costs, plus removal costs, net of salvage, are charged to accumulated depreciation. The Department’s capitalization policy considers four factors. Property will be cap-italized when:

1) The combined cost to put a unit in service is more than $500.

2) The unit’s estimated life is at least three years.

3) The unit is vital to the Department and must be controlled, and tracked, even if it falls under the dollar limit stated in (1) above. Watt-hour meters to record electric usage are the only unit in this category.

4) The Public Service Board rules in a rate making decision that the Department will capitalize a cost that normally would not be capitalized based on the first three factors above. The Department does not have any assets in this category.

The depreciable lives of utility plant are as follows:

Production plant 10-50 yearsTransmission plant 33-50 yearsDistribution plant 25-50 yearsGeneral plant 5-50 yearsOther plan 5 years


Discretely Presented Component Unit – School District: Capital assets purchased or acquired with an original cost of $5,000 or more are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements and other cap-ital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-line basis over the estimated useful lives.

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The assets are valued at historical cost when available and estimated historical cost where actual invoices or budgetary data was unavailable. Donated fixed assets are valued at their estimated fair market value on the date received. All retirements have been recorded by eliminating the net carrying values. Estimated useful lives are as follows:


Buildings $ 5,000 20-50 yearsMachinery and Equipment 5,000 3-50 yearsVehicles 5,000 3-25 years

ThresholdCapitalization

L. Renewable Energy Credit Sales

In 2008, the McNeil Generating Station (McNeil) installed a Regenerative Selective Catalytic Reduction (RSCR) unit. The RSCR unit significantly reduces McNeil’s Nitrous Oxide (NOx) emission levels which allows the station to qualify to sell Connecticut Class 1 Renewable Energy Certificates (RECs). The McNeil RECs are determined to be qualified for sale based on a review of emissions outputs sub-mitted by McNeil. At the end of every quarter, an affidavit is signed stating whether or not McNeil’s emissions output met the requirements needed to sell the RECs. McNeil receives a certification from the State of Connecticut indicating that they met the standards for the quarter based on the statistics provided by McNeil. Sales are recorded as revenue upon delivery of the RECs to the customer. Effective September 1, 2014, the Department became the 100% owner of the Winooski One hydro facility. Currently operations at the facility are being managed through a contract with Northbrook Energy. Winooski One is a Low Impact Hydro Institute (LIHI) certified generator and is qualified to produce Massachusetts Class 2 RECs (non-waste-to-energy). In February 2015, the Department commissioned a 500 kw AC solar array at the Burlington International Airport. The Department owns 100% of this resource, and leases space on the parking garage roof under a long-term agreement between the Department and the Burlington International Airport. The Airport solar array is designed to help reduce the Department’s peak demand and energy needs during high-priced periods. There are several other solar arrays in Burlington that the Department purchases energy from and receives RECs as well. In October 2015, the Department commissioned a 107 kw AC solar array at the Department’s offices at 585 Pine Street. The Department owns 100% of this resource. Like the Airport solar array, the Pine Street solar array is designed to help reduce the Department’s peak demand and energy needs during high-priced periods. For the year ended June 30, 2017, REC revenue for McNeil, Winooski One hydro facility, and the solar arrays was $5,411,494, $753,364, and $37,658, respectively. For the year ended June 30, 016, REC revenue for McNeil, Winooski One hydro facility, and the solar arrays was $7,761,875, $687,844, and $20,889, respectively.

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The Department also receives RECs from Vermont Standard Offer projects pur-chased by the Vermont Purchasing Agent. Energy from these projects is assigned to BED pro-rata based on retail sales, and BED receives RECs in an amount equal to the energy it receives from these projects. At the end of 2016, the Department’s status as a distribution utility that sources 100% of the load it serves from renewable sources exempted it from purchasing energy from these projects in 2017. The Department receives RECs from the Vermont Wind Project in Sheffield (the Department is entitled to 40% of the output of the 40 MW project). During FY 2013, commercial operations commenced at the Georgia Mountain Community Wind Farm (the Department has entitlement to the full 10 MW of output from the pro-ject). Additionally, the Department receives RECs from its entitlement to 13.5 MW of the 52 MW Hancock Wind Project, which began in November 2016. The RECs from all of these wind facilities are qualified for participation in most of the high value New England REC markets, making the sale of these RECs a significant source of revenue. The Department purchases Class II RECs to replace the Class I RECs that are sold in the market to maintain its status as 100% renewably sourced. At the end of 2016, these purchases exceeded the load that needed to be offset. Due to this, 68,000 Class II Hydro RECs were sold into the market for 2016. The Department planning staff monitors output levels from the REC producing units, REC commitments made, the markets for these RECs, and the State statutes and rules that govern the creation and sale of these RECs. The Department has and will continue to involve itself in discussions/proceedings as needed, either in Vermont or elsewhere in New England, where such rules and statutes are the subject at hand. The Department periodically sells RECs either, through broker-initiated transac-tions, or through direct placement with entities that need the RECs to comply with various New England statutes. The Department enters into agreements to sell these RECs for prior, current, and future years’ production.

M. Pollution Remediation Obligations

The Electric Department faces possible liability as a potentially responsible party (PRP) with respect to the cleanup of certain hazardous waste sites. The City is cur-rently a PRP as a landowner of a hazardous waste superfund site in Burlington, Vermont that is the subject of a remediation investigation by the Environmental Protection Agency (the EPA). The Department has agreed to share on an equal basis all past and future costs incurred in connection with any and all settlements or actions resulting from the designation of the City as a PRP at this site. In light of a recent agreement between the City and the EPA concerning the remediation plan at the site, the Department believes that the likelihood of any liability material to the financial position of the Department is remote and as such, no liability has been accrued as of June 30, 2017.

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N. Compensated Absences

It is the government’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vested sick and vacation pay is accrued when incurred in the government-wide, proprietary, and fiduciary fund financial state-ments. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

O. Liabilities to be Paid from Restricted Assets

The balance in these liabilities represents accrued interest payable on the revenue bonds and construction invoices which will be paid from restricted assets. The restricted assets will also be used for additional construction of certain assets, includ-ing certain costs in accounts and contracts payable.

P. Long-Term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position.

Q. Fund Equity

Fund equity at the governmental fund financial reporting level is classified as “fund balance”. Fund equity for all other reporting is classified as “net position”.

Fund Balance - Fund balance represents the difference between the current assets/deferred outflows and current liabilities/deferred inflows. The City reserves those portions of fund balance that are legally segregated for a specific future use or which do not represent available, spendable resources and therefore, are not available for appropriation or expenditure. Unassigned fund balance indi-cates that portion of fund balance that is available for appropriation in future periods.

The City’s fund balance classification policies and procedures are as follows: 1) Nonspendable funds represents amounts that cannot be spent because they

are either (a) not in spendable form (i.e., inventory or prepaid items) or (b) legally or contractually required to be maintained intact (i.e., perpetual care). This fund balance classification includes general fund reserves for prepaid expenditures, inventory, and nonmajor governmental fund reserves for the principal portion of permanent trust funds

2) Restricted funds represent amounts that are restricted to specific purposes by constraints imposed by creditors, grantors, contributors, or laws or regula-tions of other governments, or constraints imposed by law through constitu-tional provisions or enabling legislation. In the case of capital project funds, these funds are restricted for projects financed by bonds.

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3) Committed funds represent amounts that can only be used for specific pur-poses pursuant to constraints imposed by formal action, resolutions, of the City’s highest level of decision-making authority, the City Council. Subse-quent City Council meeting is necessary to modify or rescind a fund balance commitment.

4) Assigned funds represent amounts that are constrained by the City’s intent to use these resources for a specific purpose. The City’s fund balance policy gives authority to the Mayor to delegate assignments to staff.

5) Unassigned funds represent the residual classification for the general fund and include all amounts not contained in other classifications. Unassigned amounts are available for any purpose. Temporary fund balance deficits are reported as negative amounts in the unassigned classification in other gov-ernmental funds. Positive unassigned amounts are reported only in the gen-eral fund.

When an expenditure is incurred that would qualify for payment from multiple fund balance types, the City uses the following order to liquidate liabilities: restricted, committed, assigned, and unassigned. Net Position - Net position represents the difference between assets/deferred out-flows and liabilities/deferred inflows. Net investment in capital assets, consist of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through exter-nal restrictions imposed by creditors, grantors, or laws or regulations of other gov-ernments. The remaining net position is reported as unrestricted.

R. Use of Estimates

The preparation of basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures for contingent assets and liabilities at the date of the basic financial statements, and the reported amounts of the revenues and expenditures/expenses during the fiscal year. Actual results could vary from estimates that were used.

2. Stewardship, Compliance, and Accountability

A. Liquidity Risk

During fiscal year 2013, the City issued a $9,000,000 Stability Bond to decrease its reliance on short-term cash flow financing. Prior to the issuance of the stability bonds, the City faced liquidity risk which is the risk of not having sufficient liquid financial resources to meet obligations when they fall due, or having to incur exces-sive costs to do so. Primarily as a result of the Burlington Telecom (BT) deficit and various capital project and enterprise funds deficits, the City had relied on short-

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term borrowing to obtain cash to pay operating expenditures. On July 1, 2013, the City signed a Revolving Tax Anticipation Line of Credit for $10,000,000 which matured on June 30, 2014, and renewed on July 1, 2014. The General Fund unassigned fund balance includes the proceeds of the $9,000,000 stability bond from fiscal year 2013. It is the City’s intent to arrange its financial affairs, manage its budget and provide for future balanced financial operations. The City’s current plans include:

Adhere to policy with financing first, and spending second.

Continue to monitor cash position daily, and update forecast weekly.

Improve the collection rate on outstanding receivables.

Refinance short-term debt with attractive rates, and issue long-term debt approved by the voters.

Utilize lines of credit (LOC) instead of anticipation notes and reduce the amounts of LOC.

Ensure Enterprise and Special Funds operate at a profit, and are cash posi-tive reducing reliance on General Fund pooled cash.

B. Budgetary Information

The City follows these procedures in establishing the budgetary data reflected in the financial statements for the General Fund:

1) Departments, and departments with commission approval, prepare detailed recommendations to the Mayor on the budget. Prior to June 15, the Mayor, with the assistance of the other members of the Board of Finance, prepares and submits to the City Council a proposed budget for the fiscal year com-mencing the following July 1. The operating budget includes proposed expenditures and estimated revenues.

2) Prior to July l, the budget is legally enacted through passage of a resolution of the City Council.

3) The Mayor may propose, with the advice of the Board of Finance, amend-ments to the budget. Such proposed amendments require a majority approval of the City Council. The amount of such proposed amendments may be decreased by a simple majority vote of the City Council. Such proposed amendments may be increased above the level proposed by the Mayor only with a two-thirds vote of the City Council.

4) The Board of Finance is authorized to transfer budgeted amounts between line items within an appropriation account or within accounts of a depart-ment. Any revisions which increase the total expenditures of any depart-ment function or fund above the original appropriation must be approved by resolution of the City Council.

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5) That portion of the designated fund balance that consists of operating and capital improvement carry-overs, represents unexpended appropriations, which are allowed to be carried over to later years as provided for by City Charter or by resolution of the City Council. All other unexpended appro-priations lapse at the close of the fiscal year. The City Charter specifically prohibits expenditures in excess of appropriations, except on an emergency basis for health, police, fire and public welfare.

6) The City of Burlington tax rate can change each year by the cost of CCTA, Retirement, County and Debt Service without voter approval. However, any rate change on the tax rate for other purposes, above the maximum approved tax rate previously approved by voters, must be approved by City voters.

7) Title III, Section 70(a) of the Burlington City Charter defines the legal level of budgeting control at the department level. Excerpts of Section 70(a) are as follows:

No superintendent, board or commission member or corresponding exec-utive officer of any city department, with the exception of the health, police and fire departments, and then only in case of an emergency, shall expend any money or incur any obligation, unless there is an available appro-priation from which the same may be paid and to which it may be charged, and shall not at any time expend any money or incur any obli-gation in excess of such appropriation. In case any such superintendent, board or commission member or corresponding executive officer of any city department violates this provision, the city chief administrative officer shall report such occurrence to the mayor and to the city council. The mayor shall advise the city council as to whether there was appropriate justification for such violation and if the mayor and city council agree that such violation was unjustified, the mayor may recommend and the city council may determine that the office shall thereupon become vacant and shall be forthwith filled for the unexpired term of the officials authorized to make the original appointment in such case. Nothing in this section shall be construed to authorize the city council to remove a duly-elected school commissioner or the superintendent of schools.

Encumbrance accounting, under which purchase orders, contracts and other com-mitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is not employed as an extension of formal budget-ary integration in any fund in the City.

C. Budgetary Basis

The general fund final appropriation appearing on the “Budget and Actual” page of the fund financial statements represents the final amended budget after all reserve fund transfers and supplemental appropriations.

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D. Budget/GAAP Reconciliation

The budgetary data for the general fund is based upon accounting principles that differ from generally accepted accounting principles (GAAP). Therefore, in addi-tion to the GAAP basis financial statements, the results of operations of the general fund are presented in accordance with budgetary accounting principles to provide a meaningful comparison to budgetary data. The following is a summary of adjustments made to the actual revenues and other sources, and expenditures and other uses, to conform to the budgetary basis of accounting.

General Fund

Revenues/expenditures(GAAP Basis) $ 60,638,420 $ 59,392,074

Other financing sources/uses(GAAP Basis) 6,275,567 3,898,247

Reverse expenditure with future funding source - (249,021)

Reverse refunding gross up (2,865,595) (2,865,595)

Reverse gross up of capital leases (1,699,383) (1,699,383)

Budgetary Basis $ 62,349,009 $ 58,476,322

Revenuesand Other

Financing Sources

Expendituresand Other

Financing Uses

E. Budget Over Expenditures

The Nondepartmental line was overspent by $263,429 due to attrition. The Debt service line was overspent by $252,570 due to additional costs covered by a bond premium. The Transfers line was over spent by $66,784 due to the bond premium used to finance a capital project.

F. Deficit Fund Equity

Certain individual funds reflected unassigned fund balance deficits as of June 30, 2017. It is anticipated that the deficits will be eliminated through future depart-mental revenues, bond proceeds, and transfers from other funds. See the combining statements for deficits which are reflected as negative unassigned fund balance.

3. Cash and Cash Equivalents

The custodial credit risk for current operating deposits is the risk that in the event of a bank failure, the City’s deposits may not be recovered.

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Primary Government – The deposits at June 30, 2017 totaled $76,637,543, of which $38,082,505 were insured or collateralized by the FDIC and the FHLB Pittsburgh letter of credit up to $20,000,000 and FHLB Cincinnati letter of credit up to $20,000,000. At June 30, 2017, $38,555,038 remains uncollateralized and exposed to custodial credit risk. Discretely Presented Component Unit – School District – At June 30, 2017, the School District has an outstanding irrevocable standby letter of credit issued by the Federal Home Loan Bank of Pittsburgh serving as collateral for its deposits held at TD, Bank, N.A. This letter of credit, which expires at the close of business on ________, authorizes one draw only up to the amount of $_______. There were no draws for the year ended June 30, 2016. Component Unit Fiduciary in Nature – BERS – At June 30, 2017, the System’s deposits exceeded collateralization levels when combined with the City.

4. Investments

Primary Government, Excluding Electric Department

A. Investments

The City’s investments include various certificates of deposits for a total of $3,994,000 and US Treasury and other US Government obligation securities in the amount of $9,534,520.

B. Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. The City’s investment in debt related securities include US Treasury and other US Government obligation securities with implicit rating of AAA.

C. Custodial Credit Risk

The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The City does not have policies for custodial credit risk. The City’s investment in debt related securities was not insured or collateralized.

D. Concentration of Credit Risk

The City places no limit on the amount the City may invest in any one issuer. At June 30, 2017, the City did not have any investments in any one issuer (other than U.S. Treasury and Government agencies securities) that represented 5% or more of City investments.

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E. Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City has a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

F. Foreign Currency Risk

Foreign currency risk is the risk that changes in foreign exchange rates will adversely affect the fair value of an investment. The City does not have any such investments, or policies for foreign currency risk.

G. Fair Value

The City categorizes its fair value measurements within the fair value hierarchy established by Governmental Accounting Standards Board Statement No. 72 Fair Value Measurement and Application (GASB 72). The hierarchy is based on the valuation inputs used to measure the fair value of the asset and give the highest priority to unadjusted quoted prices in active markets for identical assets or liabili-ties (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

Level 1 - Unadjusted quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable. Level 3 – Valuations derived from valuation techniques in which significant inputs are unobservable.

The City categorizes its fair value investments as follows:

Description

Investments by fair value level:Debt securities:

Federal agency securities $ 8,008,025 $ - $ 8,008,025 $ - US Treasury notes 1,526,495 - 1,526,495 -

Total $ 9,534,520 $ - $ 9,534,520 $ -

identical assets inputs inputs (Level 1) (Level 2) (Level 3)

markets for observable unobservable

Fair Value Measurements Using:

Quoted pricesin active Significant Significant

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Burlington Electric Department

A. Investments

The Department has a formal investment policy and is authorized per Article 1, Section 1.1 of the General Bond Resolution to invest in obligations as follows:

1) Direct obligations of the United States of America or obligations guaranteed by the United States of America.

2) Bonds, notes or other evidence of indebtedness issued or guaranteed by the CoBank, Federal Intermediate Credit Banks, FHLB, FNMA, GNMA, Export-Import Bank of the United States, Federal Land Banks, U.S. Postal Service, Federal Financing Bank, or any agency or instrumentality of or corporation wholly owned by the United States of America.

3) New Housing Authority Bonds issued by public agencies or municipalities and fully secured by a pledge of annual contributions under annual contribu-tion contracts with the United States or America, or Project Notes issued by public agencies or municipalities and fully secured by a requisition or pay-ment agreement with the United States of America.

4) Obligations of any state, commonwealth or territory of the United States of America, or the District of Columbia, or any political subdivision of the foregoing, with an investment grade rating not lower than the three highest categories by at least one nationally recognized debt rating service.

5) Certificates of deposit and bankers acceptances issued by banks which are members of the FDIC and each of which has a combined capital and surplus of not less than ten million dollars, provided that the time deposits in and acceptances of any bank under the Resolution (a) do not exceed at any time twenty-five percent of the combined capital and surplus of the bank or (b) are fully secured by obligations described in items 1, 2, 3, and 4 of this paragraph.

6) Repurchase contracts with banks which are described in item 5 of this para-graph, or with recognized primary dealers in government bonds, fully secured by obligations described in items 1, 2, 3, and 4 or this paragraph.

B. Concentration of Credit Risk

Concentration of credit risk of investments is the risk of loss attributable to the magnitude of a government’s investment in a single issuer. The Electric Department invests its current operating cash in money market accounts with TD Bank, KeyBank, and Northfield Savings and its restricted noncurrent funds in several money market accounts with its bond trustees (US Bank and Peoples United), which exceed 18% of the total investment balance at June 30, 2017. The invested balance of current money market funds at June 30, 2017 was $2,206,053. The invested balance on noncurrent money market funds at June 30, 2017 was $3,499,498. The invested balance of noncurrent Certificates of Deposit at June 30, 2017 was $2,757,396.

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C. Interest Rate Risk

Interest rate risk is the risk that changes in interest rates of debt investments that will adversely affect the fair value of an investment. The Electric Department has mini-mized its risk exposure as its investments are limited to government securities and other conservative investments as outlined in the investment policy. The Electric Department’s investments as of June 30, 2017 (all of which are restricted by Bond resolution) only included money market funds and certificates of deposit. The Department is required by its bond indenture to make monthly deposits into the renewal and replacement fund equal to 10% of the monthly revenue bond debt service funding requirements. Funds on deposit may be withdrawn from the renewal and replacement fund for expenses allowed by the bond covenant. Amounts in excess of $867,000 at June 30 may be returned to the revenue fund. A summary of deposits with bond trustees is as follows:

6/30/17

Bond funds:Renewal and replacement fund $ 1,408,608 Debt service fund 2,090,889 Debt service reserve fund 2,757,397

6,256,894 Accrued interest receivable 72,547

Total $ 6,329,441

D. Fair Value

The Department categorizes its money market investments within level 1 of the fair value hierarchy established by GASB 72.

Discretely Presented Component Unit – School District

A. Credit Risk

Statutes for the State of Vermont authorize the School District to invest in obliga-tions of the U.S. Treasury, agencies and instrumentalities, other states and Canada, provided such securities are rated within the three highest grades by an approved rating service of the State of Vermont, corporate stocks and bonds within statutory limits, financial institutions, mutual funds and repurchase agreements. The School District does not have an investment policy on credit risk. Generally, the School District invests excess funds in savings accounts and various insured certificates of deposit.

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B. Custodial Credit Risk

The custodial credit risk for investments is that, in the event of failure of the coun-terparty, the School District will not be able to recover the value of its investments or collateral securities that are in possession of an outside party. Currently, the School District does not have a policy for custodial credit risk for investments. At June 30, 2017, the School District’s investments of $________ in certificates of deposit were fully insured by federal depository insurance and consequently were not exposed to custodial credit risk.

C. Interest Rate Risk

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The School District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from fluctuations in interest rates.

Burlington Employees Retirement System

A. Credit Risk

The System invests in private equities, which are exempt from the credit risk disclosure.

B. Custodial Credit Risk

The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The System does not have a policy for custodial credit risk. The System’s investment in private equities has a custodial credit risk exposure because the related securities are either uninsured or uncollateralized.

C. Concentration of Credit Risk

The System does not have a policy for concentration of credit risk. The following represents investments in one issuer greater than 5% of total investments:

EB DV Non-SL Stock Index Fund $ 53,766,431 EB DL Smid Cap Stock Index Fund $ 31,874,587 EB DV Non-SL International Stock Index Fund $ 19,344,046 EB DV Non-SL Emerging Markets Stock Index Fund $ 18,651,478 EB DV Non-SL Intermediate Govt/Credit Bond Index Fund $ 30,657,024

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D. Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. The System does not have a policy for interest rate risk.

E. Foreign Currency Risk

Foreign currency risk is the risk that changes in foreign exchange rates will adversely affect the fair value of an investment. The System does not have a policy to manage foreign currency risk.

F. Fair Value

GASB 72 established the fair value hierarchy levels based on the valuation inputs used to measure the fair value of the asset. The System does not place their invest-ments by these levels, as they are all measured at NAV (net asset value per share or its equivalent), such as share of index funds or partnership member units. Investments that are measured at fair value using the NAV as a practical expedient are not classified in the fair value hierarchy per GASB 72. Hamilton Lane and Sustainable Woodlands investment value is based on the System’s share of fair value of partner’s capital at year end. The System’s share of EB DV and DL Index Funds of the Bank of New York Mellon were valued based on net asset values of the Funds derived from audited financial statements of the respective funds. The investment strategy of the System matches the investment strategy of the funds. The primary holdings of the BNY Mellon funds are as follows:

EB DV Non-SL Stock Index Fund – level 1 EB DL Smid Cap Stock Index Fund – level 2 EB DV Non-SL International Stock Index Fund – level 1 EB DV Non-SL Emerging Markets Stock Index Fund – level 1 EB DV Non-SL Intermediate Govt/Credit Bond Index Fund – level 2

The following summarizes the investment strategies of the underlying BNY Mellon funds:

Equities – Stocks traded on U.S. security exchanges are valued by the Service approved by the Trustee at closing market prices on the valuation date. Stocks traded on a non-U.S. security exchange are valued at closing market prices on the applicable non-U.S. security exchange on the valuation date. These types of investments are generally categorized within Level 1 of the fair value hierarchy. If market quotations are not readily available for any stocks traded on U.S. or non-U.S. security exchanges, the assets may be valued by a method the Trustee of the Fund has determined accurately reflects fair value. In these instances, stocks are generally categorized within Level 2 of the fair value hierarchy.

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Bond funds – Fixed income securities are valued on the basis of valuations provided by the Service which determines valuations using methods based upon market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders. These valua-tions are based on methods which include the consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. If market quotations are not readily available for valuations, assets may be valued by a method the Trustee of the Fund has determined accurately reflects fair value. These types of invest-ments are generally categorized within Level 2 of the fair value hierarchy.

The System categorizes its investments as follows:

Investments measured at the net asset value (NAV):

Hamilton Lane Secondary Fund II LP $ 413,090 $ 417,305 N/A (a) N/A Hamilton Lane Private Equity Offshore Fund VII Series A LP 1,097,094 195,175 N/A (a) N/A Hamilton Lane Private Equity Offshore Fund VII Series B LP 647,307 174,774 N/A (a) N/A Sustainable Woodlands Fund II LP 3,098,281 - N/A (a) N/A EB DV Non-SL Stock Index Fund 53,766,431 - daily 1 day EB DL Smid Cap Stock Index Fund 31,874,587 - daily 1 day EB DV Non-SL International Stock Index Fund 19,344,046 - daily 1 day EB DV Non-SL Emerging Markets Stock Index Fund 18,651,478 - weekly 2 days EB DV Non-SL Intermediate Govt/Credit Bond Index Fund 30,657,024 - daily 1 day USB Realty Investors LLC - Trumbull Prop 15,477,946 - N/A (a) N/A

Total $ 175,027,284

(a) Units may be sold at any time on the secondaries market, with approval of the General Partner, although not ordinarily done, as this mostly likely will result in a loss. Parternship agreements are entered into with the intent of holding them to maturity when the partnerships sell all the remaining assets and declares distributions. Therefore, redemptions are not typically eligible until end of partnership terms.

Value Commitments eligible) Period

RedemptionFrequency Redemption

Unfunded (If currently Notice

5. Taxes Receivable

The City is responsible for assessing and collecting its own property taxes as well as education property taxes for the State. Property taxes are assessed based on property valuations as of April 1, annually. Taxes are due four times per year on August 12, November 12, March 12, and June 12. Taxes unpaid after each due date are considered to be late and are subject to 1% interest added on the next day; an additional 4% interest is added after the tenth day late and an additional 1% per month thereafter. Taxes which remain unpaid ten days after the June 12 due date are delinquent and are subject to an 8% penalty and interest calculated at 12%. Unpaid taxes become an enforceable lien on the property and such properties are subject to tax sale.

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Taxes receivable at June 30, 2017 consist of the following:

Property taxes:2017 $ 602,638 2016 142,263 2015 53,861 Prior years 758,857

Gross receipts taxes 466,859 Allowance for doubtful taxes (151,348)

Total $ 1,873,130

6. User Fees Receivable

User fees receivable include amounts due from customers for electric service, rent and passenger facility charges at the airport, cable, internet and phone services, and water, wastewater, and stormwater usage. User fees receivable are reported net of an allow-ance for doubtful accounts estimated at up to 30% of accounts receivable depending on the aging of the receivables. Water, wastewater, and stormwater delinquent receivables are liened in a similar manner as property taxes, described in Note 5. User fees receivable and related allowance for doubtful accounts at June 30, 2017 consist of the following:

Billed Estimated Allowance forService Fees Unbilled Fees Doubtful Fees Total

Electric $ 5,047,210 $ 2,072,118 $ (299,653) $ 6,819,675 Airport 1,255,679 - (26,321) 1,229,358 Nonmajor Enterprise Funds:

Telecom 1,023,726 3,878 (114,447) 913,157 Wastewater 786,428 551,617 (3,000) 1,335,045 Water 712,453 431,736 (3,000) 1,141,189 Stormwater 168,406 119,573 - 287,979

Total $ 8,993,902 $ 3,178,922 $ (446,421) $ 11,726,403

7. Departmental and Other Receivables

Departmental and other receivables, as reported in the governmental funds, represent ambulance, police tickets, local option sales tax, community and economic develop-ment office receivables, and other reimbursements.

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Gross

Allowance for Doubtful

Accounts Total

Police tickets $ 1,807,420 $ (1,098,135) $ 709,285 Local option sales tax 571,604 - 571,604 Ambulance and fire 528,712 (192,889) 335,823 Waterfront access 280,141 - 280,141 Street franchise fees 253,579 - 253,579 Code enforcement 74,600 (31,813) 42,787 Recycling 71,924 - 71,924 Other 545,768 (6,827) 538,941

Total $ 4,133,748 $ (1,329,664) $ 2,804,084

8. Intergovernmental Receivables

This balance represents reimbursements requested from Federal and State agencies for expenditures incurred in fiscal 2017.

Total

Community development grants $ 1,202,393 $ - $ 1,202,393 Capital project grants 491,746 - 491,746 Airport improvement program (AIP) grants - 4,560,110 4,560,110 Stormwater revolving loan - 503,158 503,158 Other state receivable - 57,211 57,211

Total $ 1,694,139 $ 5,120,479 $ 6,814,618

ActivitiesGovernmental Business-Type

Activities

9. Loans Receivables

The City, through various state and federal grant programs, has extended loans for the development or rehabilitation of residential and commercial properties within the City and small business loans for new Burlington businesses. The repayment terms of these loans and interest rates all vary and are contingent on numerous factors outside of the control of the City, such as the financial viability of the projects. It is the City’s policy to recognize the grant revenues when the loans are repaid.

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The following is a summary of the Governmental Fund’s major components loans receiv-ables at June 30, 2017: Community and Economic Development loans: Less: Less:

Receivable Discount Allowance Total

HODAG loans $ 7,415,942 $ - $ (6,949,348) $ 466,594 Housing and Urban Development Programs:

HOME loans 7,982,790 (2,862,485) (4,185,254) 935,051 Lead paint loans 2,625,634 (199,518) (1,821,340) 604,776 CEDO admin loan 2,006,678 (220,742) - 1,785,936 Other loans 1,392,595 (104,637) (301,807) 986,151

Total CEDO loans $ 21,423,639 $ (3,387,382) $ (13,257,749) $ 4,778,508

The following is a summary of the Primary Government’s major components of loans receivable at June 30, 2017:

Governmental Business-Type

Activities Activities TotalCEDO loans, from above $ 4,778,508 $ - $ 4,778,508

1993 relief loans (3) from Champlain Housing Trust Corporation, offset by loans payable. The total quarterly payments are $21,588 including interest rates between 3.25% - 4.00%, maturing in FY2024 and FY2025. 527,005 - 527,005

Multi-generational loan receivable from Champlain Housing Trust Corporation, offset by loan payable. The monthly payment is $1,879, maturing on October 1, 2028. 194,775 - 194,775

Airport loan for $1,400,000 to assist in financing construction of the Aviation Support Hanger. The terms require annual payments of $93,172 for 20 years with an interest rate of 3%, maturing in June 2026. - 734,084 734,084

Total loans receivable 5,500,288 734,084 6,234,372

Less: amount due within one year (82,084) (72,136) (154,220)

Loans receivable, net of current portion $ 5,418,204 $ 661,948 $ 6,080,152

10. Capital Lease Receivable

The governmental activities have one capital lease receivable from Westlake Parking, LLC dated 7/26/2007. The annual lease payment is $72,000, including interest at 7% annually, maturing on 7/26/2026 with a lump sum payment of $448,000. The lease requires an annual contribution of $6,000 to Burlington Community Development Cor-poration (BCDC).

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On the fund basis BCDC, a nonmajor special revenue fund, reports the receivable and an offsetting unavailable revenue (deferred inflow). Expected future receipts of the lease receivables are as follows:

FiscalYear Principal Interest Total

2018 $ 20,659 $ 51,341 $ 72,000 2019 22,105 49,895 72,000 2020 23,653 48,347 72,000 2021 25,309 46,691 72,000 2022 27,080 44,920 72,000

2023-2027 614,632 193,368 808,000

Total $ 733,438 $ 434,562 $ 1,168,000

11. Interfund Advances and Transfers

Although self-balancing funds are maintained, most transactions flow through the gen-eral fund. In order to obtain accountability for each fund, interfund receivable and payable accounts must be utilized. The composition of advances to/from other funds (amounts considered to be long-term) as of June 30, 2017 is as follows:

Fund

General fund $ 1,383,664 $ - Other Nonmajor Governmental funds:

Community and economic development - 245,183 Community development corporation - 221,588 Champlain parkway - 144,858 Wayfinding - 13,111 Parks - 448,785 Downtown westlake 221,588 234,879 Great streets - 296,848

Total $ 1,605,252 $ 1,605,252

Advances toOther Funds

Advances fromOther Funds

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The City reports interfund transfers between many of its funds. The sum of all transfers presented in the table agrees with the sum of interfund transfers presented in the gov-ernmental and proprietary fund financial statements. The following is an analysis of interfund transfers made in fiscal year 2017:

Governmental Funds:

Major funds:General fund $ 13,617 $ 1,060,397 Nonmajor funds:

Special Revenue funds:Traffic - 10,665 Community and economic development 253,250 - TIF waterfront - 464,570 Church street market place 11,000 - Dedicated taxes 182,480 206,978

Capital Project funds:Champlain parkway 26,146 - Waterfront access 574,682 - Capital improvement program 124,018 1,047,861 Wayfinding 10,665 - FEMA 10,580 - Parks 1,100,000 - Great streets 441,614 - Other 56,036 -

Permanent funds:Cemetery - 13,617

Subtotal Nonmajor Governmental funds 2,790,471 1,743,691

Grand Total $ 2,804,088 $ 2,804,088

Transfers In Transfers Out

Transfers are used to (1) move revenues from the fund that statute or budget requires collecting them to the fund that statute or budget requires to expend them, and (2) use unrestricted revenues collected in the general fund to finance various programs and accounted for in other funds in accordance with budgetary authorizations.

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12. Capital Assets

Capital asset activity for the City’s Governmental and Business-Type Activities, as well as each enterprise fund, for the year ended June 30, 2017 was as follows:

Governmental Activities: Capital assets, not being depreciated:

Land $ 14,673,099 $ 37,857 $ - $ 14,710,956 Construction in progress 24,975,094 4,560,317 (17,929,606) 11,605,805 Antiques and works of art 52,000 - - 52,000

Total capital assets, not being depreciated 39,700,193 4,598,174 (17,929,606) 26,368,761

Capital assets, being depreciated:Land improvements 3,344,865 8,908,910 - 12,253,775 Buildings and building improvements 57,520,913 1,269,254 - 58,790,167 Vehicles, machinery, equipment and furniture 22,940,226 1,822,068 (699,632) 24,062,662 Book collections 2,000,116 186,766 - 2,186,882 Infrastructure 116,267,751 9,510,503 - 125,778,254

Total capital assets, being depreciated 202,073,871 21,697,501 (699,632) 223,071,740

Less accumulated depreciation for:Land improvements (1,397,839) (260,307) - (1,658,146) Buildings and building improvements (13,457,650) (853,190) - (14,310,840) Vehicles, machinery, equipment and furniture (16,920,838) (1,473,232) 650,663 (17,743,407) Book collections (1,525,227) (195,078) - (1,720,305) Infrastructure (69,833,743) (3,780,984) - (73,614,727)

Total accumulated depreciation (103,135,297) (6,562,791) 650,663 (109,047,425)

Total capital assets, being depreciated, net 98,938,574 15,134,710 (48,969) 114,024,315

Governmental activities capital assets, net $ 138,638,767 $ 19,732,884 $ (17,978,575) $ 140,393,076

Beginning Balance Increases Decreases

Ending Balance

Capital assets, not being depreciated: Land $ 26,323,895 $ 5,537,979 $ - $ 31,861,874 Construction in progress 34,681,937 9,104,676 (8,792,010) 34,994,603


Capital assets, being depreciated:Land improvements 107,528,610 5,555,068 - 113,083,678 Buildings and building improvements 86,951,619 17,731 - 86,969,350 Vehicles, machinery, equipment and furniture 26,943,753 4,899,538 (280,078) 31,563,213 Distribution and collection systems 239,456,581 8,823,588 (6,238,456) 242,041,713 Intangible asset 6,000,000 - - 6,000,000

Total capital assets, being depreciated 466,880,563 19,295,925 (6,518,534) 479,657,954

Less accumulated depreciation for:Land improvements (51,861,983) (3,751,336) - (55,613,319) Buildings and building improvements (34,783,643) (2,524,106) - (37,307,749) Vehicles, machinery, equipment and furniture (18,147,418) (1,785,761) 202,860 (19,730,319) Distribution and collection systems (122,551,837) (7,247,325) 5,284,274 (124,514,888) Intangible asset (600,000) (300,000) - (900,000)

Total accumulated depreciation (227,944,881) (15,608,528) 5,487,134 (238,066,275)

Total capital assets, being depreciated, net 238,935,682 3,687,397 (1,031,400) 241,591,679

Business-type activities capital assets, net $ 299,941,514 $ 18,330,052 $ (9,823,410) $ 308,448,156

Business-Type Activities-Combined Enterprise Funds:


Ending Balance

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Electric Enterprise Fund: Capital assets, not being depreciated: Land $ 1,335,521 $ - $ - $ 1,335,521 Construction in progress 2,339,727 6,431,867 (6,008,158) 2,763,436


Capital assets, being depreciated:Distribution and collection systems 185,315,039 7,477,550 (6,189,969) 186,602,620

Total capital assets, being depreciated 185,315,039 7,477,550 (6,189,969) 186,602,620

Less accumulated depreciation for:Distribution and collection systems (89,885,143) (6,248,794) 5,239,366 (90,894,571)

Total accumulated depreciation (89,885,143) (6,248,794) 5,239,366 (90,894,571)

Total capital assets, being depreciated, net 95,429,896 1,228,756 (950,603) 95,708,049

Electric Enterprise Fund capital assets, net $ 99,105,144 $ 7,660,623 $ (6,958,761) $ 99,807,006


Ending Balance

Airport Enterprise Fund: Capital assets, not being depreciated: Land $ 23,931,372 $ 5,537,979 $ - $ 29,469,351 Construction in progress 32,187,874 2,636,809 (2,629,516) 32,195,167


Capital assets, being depreciated:Land improvements 77,609,575 5,555,068 - 83,164,643 Buildings and building improvements 85,607,593 2,053 - 85,609,646 Vehicles, machinery, equipment and furniture 10,627,298 1,544,994 - 12,172,292

Total capital assets, being depreciated 173,844,466 7,102,115 - 180,946,581

Less accumulated depreciation for:Land improvements (35,567,085) (3,019,034) - (38,586,119) Buildings and building improvements (34,511,833) (2,491,712) - (37,003,545) Vehicles, machinery, equipment and furniture (6,130,043) (648,125) - (6,778,168)

Total accumulated depreciation (76,208,961) (6,158,871) - (82,367,832)

Total capital assets, being depreciated, net 97,635,505 943,244 - 98,578,749

Airport Enterprise Fund capital assets, net $ 153,754,751 $ 9,118,032 $ (2,629,516) $ 160,243,267


Ending Balance

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Telecom Nonmajor Enterprise Fund: Capital assets, not being depreciated: Land $ 157,800 $ - $ - $ 157,800

Total capital assets, not being depreciated 157,800 - - 157,800

Capital assets, being depreciated:Buildings and building improvements 1,249,991 15,678 - 1,265,669 Vehicles, machinery, equipment and furniture 2,774,226 2,804,219 - 5,578,445 Intangible asset 6,000,000 - - 6,000,000

Total capital assets, being depreciated 10,024,217 2,819,897 - 12,844,114

Less accumulated depreciation for:Buildings and building improvements (266,637) (28,633) - (295,270) Vehicles, machinery, equipment and furniture (437,403) (538,451) - (975,854) Intangible asset (600,000) (300,000) - (900,000)

Total accumulated depreciation (1,304,040) (867,084) - (2,171,124)

Total capital assets, being depreciated, net 8,720,177 1,952,813 - 10,672,990

Telecom Enterprise Fund capital assets, net $ 8,877,977 $ 1,952,813 $ - $ 10,830,790


Ending Balance

Wastewater Nonmajor Enterprise Fund: Capital assets, not being depreciated: Land $ 847,952 $ - $ - $ 847,952

Total capital assets, not being depreciated 847,952 - - 847,952

Capital assets, being depreciated:Land improvements 29,919,035 - - 29,919,035 Buildings and building improvements 94,035 - - 94,035 Vehicles, machinery, equipment and furniture 11,981,171 453,255 (255,595) 12,178,831 Distribution and collection systems 17,689,669 43,046 - 17,732,715

Total capital assets, being depreciated 59,683,910 496,301 (255,595) 59,924,616

Less accumulated depreciation for:Land improvements (16,294,898) (732,302) - (17,027,200) Buildings and building improvements (5,173) (3,761) - (8,934) Vehicles, machinery, equipment and furniture (10,615,967) (501,169) 181,376 (10,935,760) Distribution and collection systems (7,904,225) (355,484) - (8,259,709)

Total accumulated depreciation (34,820,263) (1,592,716) 181,376 (36,231,603)

Total capital assets, being depreciated, net 24,863,647 (1,096,415) (74,219) 23,693,013

Wastewater Enterprise Fund capital assets, net $ 25,711,599 $ (1,096,415) $ (74,219) $ 24,540,965


Ending Balance

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Water Nonmajor Enterprise Fund: Capital assets, not being depreciated: Land $ 51,250 $ - $ - $ 51,250 Construction in progress - 36,000 - 36,000

Total capital assets, not being depreciated 51,250 36,000 - 87,250

Capital assets, being depreciated:Vehicles, machinery, equipment and furniture 1,561,058 97,070 (24,483) 1,633,645 Distribution and collection systems 35,108,760 824,444 (48,487) 35,884,717

Total capital assets, being depreciated 36,669,818 921,514 (72,970) 37,518,362

Less accumulated depreciation for:Vehicles, machinery, equipment and furniture (964,005) (98,016) 21,484 (1,040,537) Distribution and collection systems (24,571,192) (581,487) 44,908 (25,107,771)

Total accumulated depreciation (25,535,197) (679,503) 66,392 (26,148,308)

Total capital assets, being depreciated, net 11,134,621 242,011 (6,578) 11,370,054

Water Enterprise Fund capital assets, net $ 11,185,871 $ 278,011 $ (6,578) $ 11,457,304


Ending Balance

Stormwater Nonmajor Enterprise Fund:Capital assets, not being depreciated Construction in Progress $ 154,336 $ - $ (154,336) $ -

Total capital assets, not being depreciated 154,336 - (154,336) -

Capital assets, being depreciated:Distribution and collection systems 1,343,113 478,548 - 1,821,661

Total capital assets, being depreciated 1,343,113 478,548 - 1,821,661

Less accumulated depreciation for:Distribution and collection systems (191,277) (61,560) - (252,837)

Total accumulated depreciation (191,277) (61,560) - (252,837)

Total capital assets, being depreciated, net 1,151,836 416,988 - 1,568,824

Other Nonmajor Enterprise Funds capital assets, net $ 1,306,172 $ 416,988 $ (154,336) $ 1,568,824


Ending Balance

In fiscal year 2017, $2,154,349 in construction in progress costs associated with the City’s Champlain Parkway were deemed impaired and are reported as a Special Item in the Statement of Activities. Depreciation expense was charged to functions of the City as follows:

Governmental Activities:General government $ 257,285Public safety 772,770 Public works 4,398,935 Community development 200,323 Culture and recreation 933,478

Total depreciation expense - governmental activities $ 6,562,791

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Business-Type Activities:Electric $ 6,248,794 *Airport 6,158,871 Telecom 867,084 Wastewater 1,592,716 Water 679,503 Stormwater 61,560

Total depreciation expense - business-type activities $ 15,608,528

*Represents depreciation of Electric Capital Assets and not regulatory depreciation expense as reported on the Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Position. A summary of Burlington’s component unit Burlington School District’s capital assets activity is as follow:

Burlington School District: Capital assets, not being depreciated:

Land $ 2,251,677 $ $ $ 2,251,677 Construction in progress 2,135,480 2,135,480

Total capital assets, not being depreciated 4,387,157 - - 4,387,157

Capital assets, being depreciated:Buildings and building improvements 51,577,651 51,577,651 Vehicles, machinery, equipment and furniture 6,763,007 6,763,007

Total capital assets, being depreciated 58,340,658 - - 58,340,658

Less accumulated depreciation for:Buildings and building improvements (14,031,072) (14,031,072) Vehicles, machinery, equipment and furniture (5,908,689) (5,908,689)

Total accumulated depreciation (19,939,761) - - (19,939,761)

Total capital assets, being depreciated, net 38,400,897 - - 38,400,897

School capital assets, net $ 42,788,054 $ - $ - $ 42,788,054


Ending Balance

13. Regulatory Assets and Other Prepaid Charges

For the Electric Department, regulatory and other prepaid charges at June 30, 2017 com-prise the following:

Deferred depreciation expense to be recovered in future years $ 2,122,673 Deferred VPSB accounting orders 133,567 Retirement of meters 173,100

Total $ 2,429,340

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A. Deferred Depreciation Expense to be Recovered in Future Years

Provisions for depreciation of capital assets, with the exception of the Joseph C. McNeil Generating Station (the McNeil Station) and the Highgate Converter Station (the Highgate Station), are reported using the straight-line method at rates based upon the estimated service lives and salvage values of the several classes of prop-erty. Depreciation of capital assets for the McNeil Station and the Highgate Station are calculated using the straight-line method. However, a portion of the current depreciation expense is only recoverable through future rates. The difference is included in deferred charges (calculated as the straight-line depreciation expense less the depreciation expense on a sinking fund basis) and will be recovered in future years. The Department recorded straight-line depreciation of $5,789,384 for the year ended June 30, 2017. In 2017 $212,494 of deferred depreciation expense was realized. Unamortized deferred depreciation balance of $2,122,673 remained at June 30, 2017.

B. Deferred-VPSB Accounting Orders

In 2012, the Department obtained an accounting order from the Vermont Public Service Board (VPSB) related to costs for the McNeil Station turbine overhaul. The total deferred cost was $935,044 and will be amortized over seven years (84 months) beginning July 2011. Amortization expense related to the deferred overhaul charges was $133,566 for 2017, and has been reported as a component of production expense. The unamortized balance at June 30, 2017 is $133,567.

C. Deferred Retirement of Meters

Due to the Smart Grid/Meter project in 2012-2013, under a Department of Public Service directive, the depreciated book value of certain retired meters has been deferred and will be amortized over a five-year period. Amortization expense related to the deferred write off was $128,512 for 2017. The unamortized balance at June 30, 2017 is $173,100.

14. Deferred Outflows of Resources

Deferred outflows of resources represent the consumption of net position by the City that is applicable to future reporting periods. Deferred outflows of resources have a positive effect on net position, similar to assets. Deferred outflows of resources related to pensions, in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions, are more fully discussed in Note 23.

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15. Accounts Payable and Accrued Expenses

Accounts payable represent fiscal year 2017 expenditures paid on or after July 1, 2017.

16. Line of Credit

In December 2015, the City issued a $2,200,000 Parking Revenue Note with KeyBank, with an interest rate of 2.50%. In fiscal 2017 the City extended the note until March 3, 2017 when it was paid off. The City issued a $5,200,000 note with Northfield Savings Bank on May 4, 2017 which matures on May 3, 2018. The note is solely payable from net revenues, after payment of operating expenses, of the City’s parking system. During the year drawdowns amounted to $2,939,312 while repayments were $1,666,817, leav-ing an outstanding balance at June 30, 2017 of $2,106,123. In February 2012, the City issued on behalf of the Electric Department, a $5,000,000 General Obligation Revenue Anticipation Note (Line of Credit) with a local bank, plac-ing the Line of Credit directly with the Electric Department. On May 25, 2017, this Line of Credit was renewed for a two-year term to May 18, 2019. The Electric Depart-ment had the entire Line of Credit balance of $5,000,000 available for use during fiscal year 2017. In September 2015, City issued on behalf of the Airport, a Grant Anticipation Line of Credit in the principal amount of up to $7,000,000. On September 20, 2016, this line of credit was renewed for one year to September 19, 2017. The note was secured by AIP grant reimbursements. During the year drawdowns on the grant amounted to $5,307,921 while repayments were $4,089,403, leaving an outstanding balance at June 30, 2017 of $1,865,191.

17. Long-Term Obligations – Primary Government

A. Types of Long-Term Obligations

General Obligation Bonds. The City issues general obligation bonds to provide resources for the acquisition and construction of major capital facilities and to refund prior bond issues. General obligation bonds have been issued for both governmental and proprietary activities. Bonds are reported in governmental activities if the debt is expected to be repaid from governmental fund revenues and in business-type activities if the debt is expected to be repaid from proprietary fund revenues. General obligation bonds are direct obligations and pledge the full faith and credit of the City.

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No-Interest Revolving Loans. The State of Vermont offers a number of no-interest revolving loan programs to utilize for predetermined purposes. Two of the five no-interest loans do charge a 2% administration fee. The City has borrowed money from the Vermont Special Environmental Revolving Fund for sewer stormwater projects. These bonds are both general obligation and revenue supported bonds. Revenue Bonds - The City issues bonds where the City pledges income to pay the debt service. Revenue bonds are reported in business type activities only because the debt is expected to be repaid from proprietary fund revenues. Certificates of Participation - The City enters into agreements for the purpose of financing the acquisition and/or renovation of land and buildings. These agreements qualify as long-term debt obligations for accounting purposes (even though they include clauses that allow for cancellation of the certificate of participation in the event the City does not appropriate funds in future years). The Certificates of Partic-ipation are reported in governmental activities because all of the debt is expected to be repaid from general governmental revenues. Other Notes Payable - The City has other notes payable to finance various capital projects through local banks and U.S. Government agencies. Capital Lease Obligations - The City enters into lease agreements as the lessee for the purpose of financing the acquisition of major pieces of equipment. These lease agreements qualify as capital lease obligations for accounting purposes (even though they include clauses that allow for cancellation of the lease in the event the City does not appropriate funds in future years) and, therefore, have been recorded at the present value of the future minimum lease payments as of the inception date of the leases. Leases are reported in governmental activities if the debt is expected to be repaid from general governmental revenue and in business–type activities if the debt is expected to be repaid from proprietary fund revenues. Compensated Absences - It is the policy of the City to permit certain employees to accumulate earned but unused benefits. The City, excluding the School Fund, allows employees to carryover up to 360 hours of vested vacation time to the next fiscal year. The City also allows all employees hired prior to July 1, 2000 to carry over the lesser of 25% of their sick leave balance or 120 hours. City employees hired after July 1, 2000 may carryover earned sick leave balances; however, it is not a vested benefit upon termination. The School Fund allows certain employees to carry over up to 80 hours vested vacation time. The School Fund also allows sick leave to be vested upon reaching certain plateaus, depending on the individual con-tract. The School has made the assumption that the employee will likely reach the eligibility threshold once they are within three (3) years of the actual vesting date. The accrual for unused compensated absences time, based on current pay rates, is recorded in the government-wide financial statements and proprietary fund finan-cial statements.

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Unamortized Premiums, Discounts, and Refunding Losses - Debt premiums, dis-counts, and refunding losses incurred in connection with the sale of bonds are amor-tized over the terms of the related debt. Unamortized balances are included as a component of long-term debt. Insurance Reserves – This liability represents an estimate of claims incurred but not reported and includes only an estimate for known loss events expected to later be presented as claims. The City is unable to estimate the amount of unknown loss events expected to become claims and expected future developments on claims already reported. Other Post-employment Benefits - The City has recorded a liability for the gov-ernmental activities in the government-wide financial statements and in the indi-vidual enterprise funds and for the business-type activities in the government-wide financial statements which represent their actuarially determined costs for post-employment benefits. These costs relate to subsidized health care and life insurance for retirees during the period from retirement to the date of eligibility for social security benefits. Compensated Absences and Post-employment Benefits are paid by the applicable fund where the employee is charged. Insurance Reserves are generally liquidated by the General Fund. A detailed listing of the general obligation bonds and other notes payable expected to be repaid by governmental funds are as follows:

AmountSerial Outstanding

Maturities Interest Amount as ofGovernmental Activities: Through Rate(s) % Issued 6/30/17

General obligation bonds:General Improvements 2007 Series A 11/01/2027 3.50 - 4.25% $ 1,000,000 $ 45,000General Improvements 2009 Series C 11/01/2029 2.00 - 4.125% 1,000,000 90,000General Improvements 2009 Series C 11/01/2029 2.00 - 4.125% 1,000,000 90,000General Improvements 2009 Series C - Street Impr. 11/01/2029 2.00 - 4.125% 2,250,000 205,000General Improvements 2011 Series A 11/01/2031 3.00 - 4.75% 1,000,000 820,000General Improvements 2011 Series A - Fire 11/01/2031 3.00 - 4.75% 1,325,000 1,085,000General Improvements 2011 Series A - Street Paving 11/01/2031 3.00 - 4.75% 3,250,000 2,660,000General Improvements 2011 Series B 11/01/2031 2.00 - 4.75% 1,000,000 815,000Public Improvement Bonds 2012 Series A 11/01/2032 5.00% 1,000,000 870,000Public Improvement Bonds 2012 Series A 11/01/2032 5.00% 2,000,000 1,745,000Taxable G.O. Bonds 2013 Series A - Fiscal Stability 11/01/2028 3.50 - 5.25% 9,000,000 7,410,000Public Improvement Bonds 2013 Series B 11/01/2033 4.00 - 6.75% 2,000,000 1,307,143Public Improvement Bonds 2014 Series A 11/15/2034 0.51 - 3.99% 2,000,000 1,800,000Public Improvement Bonds 2015 Series A 11/1/2035 5.00% 2,000,000 1,945,000Refunding Bond Series 2016A 6/30/2030 3.00 - 5.00% 1,570,000 1,995,000Public Improvement Bonds 2016 Series B 11/1/2036 4.00 - 5.00% 2,000,000 2,000,000Refunding Bond Series 2016C 11/1/2029 2.00 - 5.00% 2,545,000 2,545,000Public Improvement Bonds 2017 Series A 11/1/2036 1.20 - 3.85% 5,267,000 5,267,000Public Improvement Bonds 2017 Series B 11/1/2032 5.00% 2,730,000 2,730,000

Total general obligation bonds 35,424,143 (continued)

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(continued) Amount

Serial OutstandingMaturities Interest Amount as of

Governmental Activities: Through Rate(s) % Issued 6/30/17 Other debt:

HUD Section 108 - US Guaranteed Notes 1999 08/01/2017 5.40 - 6.20% 1,930,000 395,000 HUD Section 108 - US Guaranteed Notes 2003 08/01/2022 3.25% 3,602,000 220,000 HUD Section 108 - US Guaranteed Notes 2005 08/01/2018 variable 1,827,000 800,000 Special Obligation Tax Increment Financing Bond 11/15/2024 0.51 - 4.28% 7,800,000 4,356,789 HUD Section 108 - US Guaranteed Notes 2014 06/15/2025 5.00% 2,091,000 1,709,000 Refunding COP Series 2016A - Lakeview Garage Project 6/30/2025 3.00-5.00% 5,145,000 4,485,000 Refunding COP Series 2016B - DPW Facility Project 6/30/2021 3.00-5.00% 1,445,000 1,180,000

Total other debt 13,145,789 BCDC loans:

Gilbane property 10/30/2025 6.25% 325,571 218,048 Airport support hanger 11/1/2020 4.09% 2,977,500 2,234,367 Refinancing VEDA 11/19/2020 3.75% 560,000 428,137 Relief long term notes 11/15/2024 3.25-4.00% 996,116 527,005 Multigenerational center 10/1/2028 5.00% 302,282 194,775 Aviation support hanger 6/1/2026 3.00% 1,400,000 734,084

Total BCDC loans 4,336,416

Total Governmental Activities: $ 52,906,348

The HUD Section 108-US guaranteed notes, originally issued in 2003 and 2005, have a variable rate of interest based on the three (3) month LIBOR rate plus .2%.

A detailed listing of the general and revenue obligation bonds expected to be repaid by proprietary funds are as follows:


Maturities Interest Amount as ofBusiness-Type Activities: Through Rate(s) % Issued 6/30/17

General obligation bonds:Electric 2007 Series A Bonds 11/01/2027 3.50 - 4.25% $ 1,000,000 $ 45,000 Electric 2009 Series A Bonds 11/01/2029 2.00 - 4.375% 12,750,000 1,130,000 Electric 2009 Series B Bonds 11/01/2029 4.00 - 6.00% 8,250,000 680,000 Electric 2009 Series C Bonds 11/01/2029 2.00 - 4.125% 10,985,000 985,000 Electric 2009 Series D Bonds 11/01/2029 1.45 - 5.60% 4,615,000 390,000 Electric 2009 Series C Bonds 11/01/2029 2.00 - 4.125% 1,000,000 90,000 Electric 2009 Series C Bonds 11/01/2029 2.00 - 4.125% 1,000,000 90,000 Electric General Improvements 2011 Series A 11/01/2031 3.00 - 4.75% 1,000,000 820,000 Electric General Improvements 2011 Series B 11/01/2031 2.00 - 4.75% 1,000,000 815,000 Electric Public Improvement 2012 Series A 11/01/2032 5.00% 2,000,000 1,745,000 Electric Public Improvement 2012 Series A 11/01/2032 5.00% 1,750,000 1,525,000 Electric Taxable Public Improvement 2012 Series B 11/01/2032 6.00% 1,250,000 1,105,000 Electric G.O. Public Improvement Bonds 2013 Series B 11/01/2033 4.00 - 6.75% 3,000,000 1,960,714 Electric G.O. Public Improvement Bonds 2014 Series 3 11/01/2034 2.78% 3,000,000 2,700,000 Electric G.O. Public Improvement Bonds 2015 Series A 11/1/2035 5.00% 3,000,000 2,915,000 Electric G.O. Refunding Bond 2016 Series A 11/1/2029 2.00-5.00% 10,235,000 10,145,000 Electric G.O. Public Improvement Bonds 2016 Series B 11/1/2036 4.00 - 5.00% 3,000,000 3,000,000 Electric G.O. Refunding Bond 2016 Series C 11/1/2029 2.00 - 5.00% 7,785,000 7,785,000 Electric Taxable Refunding 2016 Series D 11/1/2029 1.15 - 3.25% 6,220,000 6,220,000 Electric Taxable Refunding 2016 Series D 11/1/2029 1.15 - 3.25% 3,460,000 3,460,000

Total general obligation bonds 47,605,714 (continued)

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(continued) Amount

Serial OutstandingMaturities Interest Amount as of

Business-Type Activities: Through Rate(s) % Issued 6/30/17

Other debt:Electric Revenue Bonds 2011 Series A 07/01/2031 4.25 - 5.75% 8,775,000 8,070,000 Electric Revenue Bonds 2011 Series B 07/01/2031 7.25 - 8.25% 3,135,000 2,940,000 Electric Revenue Bonds 2014 Series A 07/01/2035 3.78% 12,000,000 11,120,000 Electric Revenue Bonds 2014 Series B 07/01/2035 3.36% 5,820,000 4,785,000 Wastewater State of VT-EPA 2006 Series 1 (Siphon) 02/01/2027 0.00% 1,650,000 843,662 Stormwater Revenue Obligation Bond 10/01/2031 0.00% 1,204,000 356,740 Wastewater State of VT-EPA 2009 Series I (Turbo) 10/01/2031 0.00% 120,000 43,977 Wastewater State of VT-EPA 2001 Series 1 (Digester) 08/01/2027 0.00% 2,500,000 966,530 Airport Revenue Refunding 2012 Series A 07/01/2028 4.00 - 5.00% 17,670,000 17,670,000 Airport Revenue Refunding 2012 Series B 07/01/2018 3.50% 7,130,000 2,780,000 Wastewater VT Municpal Bond Bank 2014 Series 1 11/15/2033 0.643 - 4.723% 14,645,620 12,448,777 Water State Revolving Loan RF3-295 11/01/2034 1.00% 253,340 228,006 Airport Revenue Refunding 2014 Series A 07/01/2030 0.67 - 3.59% 15,660,000 14,575,000 Water System Revenue Bonds 2017 Series 11/1/2036 2.00 - 5.00% 3,250,000 3,250,000

Total other debt 80,077,692

Total Business-Type Activities: $ 127,683,406

B. Future Debt Service

The annual payments to retire all governmental general obligation long-term debt outstanding as of June 30, 2017 are as follows:

GovernmentalActivities Combined Total

2018 $ 4,122,491 $ 2,227,485 $ 6,349,976 2019 5,245,331 2,076,737 7,322,068 2020 3,633,458 1,934,380 5,567,838 2021 5,435,846 1,760,406 7,196,252 2022 3,376,013 1,613,505 4,989,518

2023 - 2027 16,043,955 5,756,086 21,800,041 2028 - 2032 10,311,254 2,397,275 12,708,529 2033 - 2037 4,738,000 519,946 5,257,946

Total $ 52,906,348 $ 18,285,820 $ 71,192,168

Principal Interest

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The annual payments to retire all business-type (and each Enterprise fund) long-term debt outstanding as of June 30, 2017 are as follows:

Business-Type ActivitiesCombined All

Enterprise Funds Total

2018 $ 7,178,741 $ 5,197,083 $ 12,375,824 2019 7,542,556 4,965,041 12,507,597 2020 7,661,447 4,698,382 12,359,829 2021 7,905,422 4,415,540 12,320,962 2022 8,189,477 4,113,122 12,302,599

2023 - 2027 44,678,358 15,154,116 59,832,474 2028 - 2032 36,178,722 5,511,422 41,690,144 2033 - 2037 8,348,683 641,413 8,990,096

Total $ 127,683,406 $ 44,696,119 $ 172,379,525

Principal Interest

Electric Enterprise Fund Total

2018 $ 4,150,000 $ 3,070,361 $ 7,220,361 2019 4,305,000 2,924,409 7,229,409 2020 4,370,000 2,775,987 7,145,987 2021 4,495,000 2,630,039 7,125,039 2022 4,645,000 2,473,782 7,118,782

2023 - 2027 24,957,143 9,310,704 34,267,847 2028 - 2032 21,958,571 3,657,165 25,615,736 2033 - 2037 5,640,000 423,489 6,063,489

Total $ 74,520,714 $ 27,265,936 $ 101,786,650

Principal Interest

Airport Enterprise Fund Total

2018 $ 2,110,000 $ 1,551,838 $ 3,661,838 2019 2,195,000 1,465,063 3,660,063 2020 2,245,000 1,364,675 3,609,675 2021 2,355,000 1,249,675 3,604,675 2022 2,480,000 1,128,800 3,608,800

2023 - 2027 14,275,000 3,756,650 18,031,650 2028 - 2032 9,365,000 705,550 10,070,550

Total $ 35,025,000 $ 11,222,251 $ 46,247,251

Principal Interest

90

Wastewater Non-major TotalEnterprise Fund

2018 $ 891,117 $ 436,690 $ 1,327,807 2019 894,294 424,683 1,318,977 2020 897,533 409,497 1,307,030 2021 900,839 390,948 1,291,787 2022 904,210 369,440 1,273,650

2023 - 2027 4,574,022 1,465,285 6,039,307 2028 - 2032 3,773,194 729,873 4,503,067 2033 - 2034 1,467,737 62,858 1,530,595

Total $ 14,302,946 $ 4,289,274 $ 18,592,220

InterestPrincipal

Water Non-major TotalEnterprise Fund

2018 $ 8,485 $ 138,194 $ 146,679 2019 128,740 150,886 279,626 2020 129,002 148,223 277,225 2021 134,272 144,878 279,150 2022 139,550 141,100 280,650

2023 - 2027 762,225 621,477 1,383,702 2028 - 2032 960,544 418,834 1,379,378 2033 - 2037 1,215,187 155,066 1,370,253

Total $ 3,478,005 $ 1,918,658 $ 5,396,663

Principal Interest

Stormwater Non-major TotalEnterprise Fund

2018 $ 19,139 $ - $ 19,139 2019 19,522 - 19,522 2020 19,912 - 19,912 2021 20,311 - 20,311 2022 20,717 - 20,717

2023 - 2027 109,968 - 109,968 2028 - 2032 121,413 - 121,413

2033 25,759 - 25,759

Total $ 356,741 $ - $ 356,741

Principal Interest

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C. Changes in General Long-Term Liabilities

During the year ended June 30, 2017, the following changes occurred in long-term liabilities for the City’s Governmental and Business-Type Activities, as well as each enterprise fund:

EqualTotal Total Less Long

Balance Balance Current Term7/1/2016 Additions Reduction Refunding 6/30/2017 Portion Portion

Governmental ActivitiesGeneral obligation bonds $ 27,219,286 $ 12,542,000 $ (1,652,143) $ (2,685,000) $ 35,424,143 $ (1,730,000) $ 33,694,143

Add unamortized premium 1,392,514 1,067,582 (156,565) (14,457) 2,289,074 (156,565) 2,132,509 Subtotal 28,611,800 13,609,582 (1,808,708) (2,699,457) 37,713,217 (1,886,565) 35,826,652

Other debt 18,822,567 969,360 (2,309,722) - 17,482,205 (2,320,355) 15,161,850 Net pension obligation 40,988,644 12,995,403 - - 53,984,047 - 53,984,047 Net OPEB obligation 1,080,440 195,507 - - 1,275,947 - 1,275,947 Obligations under capital leases 1,206,228 1,699,383 (604,563) - 2,301,048 (527,824) 1,773,224 Compensated absences 2,029,029 1,510,461 (1,305,133) - 2,234,357 (223,436) 2,010,921 Insurance reserves 2,578,345 - (505,587) - 2,072,758 (929,364) 1,143,394

Total $ 95,317,053 $ 30,979,696 $ (6,533,713) $ (2,699,457) $ 117,063,579 $ (5,887,544) $ 111,176,035


Business-type Activities - Combined Balance Balance Current TermAll Enterprise Funds 7/1/2016 Additions Reduction 6/30/2017 Portion Portion

General obligation bonds $ 46,375,714 $ 20,465,000 $ (19,235,000) $ 47,605,714 $ (2,675,000) $ 44,930,714 Add unamortized premium 2,535,360 941,855 (38,832) 3,438,383 - 3,438,383 Subtract unamortized discount (30,438) (807,646) 29,580 (808,504) - (808,504)

Subtotal 48,880,636 20,599,209 (19,244,252) 50,235,593 (2,675,000) 47,560,593

Revenue bonds payable 78,941,562 3,250,000 (4,196,045) 77,995,517 (4,336,420) 73,659,097 Add unamortized premium 2,240,165 451,652 (226,847) 2,464,970 (249,704) 2,215,266

Subtotal 81,181,727 3,701,652 (4,422,892) 80,460,487 (4,586,124) 75,874,363

State revolving loan 2,237,896 - (155,720) 2,082,176 (167,321) 1,914,855

Net pension liability 17,993,590 4,928,701 (117,228) 22,805,063 - 22,805,063 Net OPEB obligation 667,235 15,600 - 682,835 - 682,835 Obligations under capital leases 6,553,118 1,252,900 (486,626) 7,319,392 (482,988) 6,836,404 Compensated absences 1,489,490 330,649 (624,987) 1,195,152 - 1,195,152 Other noncurrent liabilities 5,259,997 - 296,294 5,556,291 - 5,556,291

Total $ 164,263,689 $ 30,828,711 $ (24,755,411) $ 170,336,989 $ (7,911,433) $ 162,425,556


Balance Balance Current TermElectric Enterprise Fund 7/1/2016 Additions Reduction 6/30/2017 Portion Portion

General obligation bonds $ 46,375,714 $ 20,465,000 $ (19,235,000) $ 47,605,714 $ (2,675,000) $ 44,930,714 Add unamortized premium 2,535,360 941,855 (38,832) 3,438,383 - 3,438,383 Subtract unamortized discount (30,438) (807,646) 29,580 (808,504) - (808,504)

Subtotal 48,880,636 20,599,209 (19,244,252) 50,235,593 (2,675,000) 47,560,593

Revenue bonds 28,345,000 - (1,430,000) 26,915,000 (1,475,000) 25,440,000 Add unamortized premium 722,396 - (43,693) 678,703 - 678,703

Subtotal 29,067,396 - (1,473,693) 27,593,703 (1,475,000) 26,118,703

Net pension liability 12,674,005 3,524,633 - 16,198,638 - 16,198,638 Net OPEB obligation 261,213 - - 261,213 - 261,213 Compensated absences 975,386 - (369,126) 606,260 - 606,260 Other noncurrent liabilities 5,259,997 - 296,294 5,556,291 - 5,556,291

Total $ 97,118,633 $ 24,123,842 $ (20,790,777) $ 100,451,698 $ (4,150,000) $ 96,301,698

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Balance Balance Current TermAirport Enterprise Fund 7/1/2016 Additions Reduction 6/30/2017 Portion Portion

Revenue bonds $ 37,040,000 $ - $ (2,015,000) $ 35,025,000 $ (2,110,000) $ 32,915,000 Add unamortized premium 1,517,769 - (183,154) 1,334,615 (173,793) 1,160,822

Subtotal 38,557,769 - (2,198,154) 36,359,615 (2,283,793) 34,075,822

Net pension liability 2,169,468 461,574 - 2,631,042 - 2,631,042 Net OPEB obligation 139,084 - - 139,084 - 139,084 Obligations under capital leases 647,110 1,252,900 (285,965) 1,614,045 (295,436) 1,318,609 Compensated absences 192,783 129,498 (91,819) 230,462 - 230,462

Total $ 41,706,214 $ 1,843,972 $ (2,575,938) $ 40,974,248 $ (2,579,229) $ 38,395,019


Telecom Non-Major Balance Balance Current TermEnterprise Fund 7/1/2016 Additions Reduction 6/30/2017 Portion Portion

Net pension liability 1,124,029 - (117,228) 1,006,801 - 1,006,801 Net OPEB obligation 122,362 15,600 - 137,962 - 137,962 Obligations under capital leases $ 5,898,641 $ - $ (193,294) $ 5,705,347 $ (187,552) $ 5,517,795 Compensated absences 97,881 96,017 (73,885) 120,013 - 120,013

Total $ 7,242,913 $ 111,617 $ (384,407) $ 6,970,123 $ (187,552) $ 6,782,571


Wastewater Non-Major Balance Balance Current TermEnterprise Fund 7/1/2016 Additions Reduction 6/30/2017 Portion Portion

Revenue bonds $ 13,181,058 $ - $ (732,281) $ 12,448,777 $ (732,281) $ 11,716,496 State revolving loans 2,009,890 - (155,720) 1,854,170 (158,836) 1,695,334 Compensated absences 78,419 59,583 (25,577) 112,425 - 112,425 Net pension liability 856,352 399,791 - 1,256,143 - 1,256,143 Net OPEB obligation 60,919 - - 60,919 - 60,919

Total $ 16,186,638 $ 459,374 $ (913,578) $ 15,732,434 $ (891,117) $ 14,841,317


Water Non-Major Balance Balance Current TermEnterprise Fund 7/1/2016 Additions Reduction 6/30/2017 Portion Portion

Revenue bonds $ - $ 3,250,000 $ - $ 3,250,000 $ - $ 3,250,000 Add unamortized premium - 451,652 - 451,652 (75,911) 375,741

Subtotal - 3,701,652 - 3,701,652 (75,911) 3,625,741 State revolving loans 228,006 - - 228,006 (8,485) 219,521 Obligations under capital leases 7,367 - (7,367) - - - Compensated absences 145,021 66,568 (85,597) 125,992 - 125,992 Net pension liability 1,169,736 542,703 1,712,439 - 1,712,439 Net OPEB obligation 81,040 - - 81,040 - 81,040

Total $ 1,631,170 $ 8,012,575 $ (92,964) $ 9,550,781 $ (160,307) $ 9,390,474


Stormwater Non-Major Balance Balance Current TermEnterprise Fund 7/1/2016 Additions Reduction 6/30/2017 Portion Portion

Revenue bonds $ 375,504 $ - $ (18,764) $ 356,740 $ (19,139) $ 337,601 Net OPEB obligation 2,617 - - 2,617 - 2,617

Total $ 378,121 $ - $ (18,764) $ 359,357 $ (19,139) $ 340,218

D. Advanced Refunding

On November 1, 2016, the City issued refunding bond series 2016C in the amount of $2,545,000 with interest rates ranging from 2.00% to 5.00% to advance refund

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series 2009C for street improvements in the amount of $1,425,000 and other prior projects totaling $1,260,000 with interest rates ranging from 2.00% to 4.125%. The 2009C was an interest only bond until November 1, 2019 when principal payments were scheduled to begin. The net proceeds on this refunding were $2,837,850 after a premium of $332,117, net of discount of $11,522 and cost of issuance, insurance and contingency fees of $27,745. The proceeds were used to purchase U.S. govern-ment securities and were deposited in an irrevocable trust with an escrow agent to provide debt service payments until called on November 1, 2018. As a result of refunding, the City reduced its total debt service requirement by $153,505 with a net present value savings of $129,875 (economic gain). The advance refunding met the requirements of an in-substance debt defeasance and the term bonds were removed from the City’s financial statements. Defeased debt at June 30, 2017 was $2,685,000.

18. Capital Lease Obligations

Primary Government

The City is the lessee of certain equipment under capital leases expiring in various years through 2034.

Capital lease for airport equipment. The rental payments are to be made in equal semiannual installments of $86,730 including interest at 3.214% annually, maturing on June 26, 2020. $ - $ 492,325

Capital lease for public works vehicle. The rental payments are to be made in equal annual installments of $7,996 including interest at 5.95% annually, maturing on June 12, 2019. 14,670 -

Capital lease for public works vehicle and plow gear. The rental payments are to be made in equal annual installments of $27,812 including interest at 2.67% annually, maturing on April 2, 2020. 78,781 -

Capital lease for public works vehicle. The rental payments are to be made in equal annual installments of $38,929 including interest at 3.28% annually, maturing on October 15, 2018. 74,189 -

Capital lease for public works sidewalk tractor. The rental payments are to be made in equal annual installments of $27,540, maturing in fiscal year 2019. 51,280 -

Capital lease for parks and recreation 2015 ford E350 cut away. The rental payments are to be made in equal annual installments of $10,584 including interest at 5.95% annually, maturing on March 11, 2019. 19,418 -

Capital lease for public works 2016 ford F450. The rental payments are to be made in equal annual installments of $11,044 including interest at 5.45% annually, maturing on July 22, 2019. 29,824 -

Capital lease for public works and parks vehicles and equipment. The rental payments are to be made in equal annual installments of $92,442 including interest at 2.33% annually, maturing on October 20, 2019. 264,786 -

GovernmentalActivities

Business-TypeActivities

(continued)

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(continued) Governmental

ActivitiesBusiness-Type

Activities Capital lease for parks and fire vehicles and equipment. The rental payments are to be made in equal annual installments of $81,413 including interest at 2.591% annually, maturing on October 20, 2019. 231,973 -

Capital lease for airport equipment. The rental payments are to be made in equal annual installments of $74,487 including interest at 2.77% annually, maturing on August 10, 2025. - 589,706

Capital lease for airport and parks vehicles, and DPW equipment. The rental payments are to be made in equal semiannual installments of $172,696 (inclusive of the Pension System) including interest at 2.465% annually, maturing on September 30, 2023. 1,536,127 532,015

Capital lease for telecom bucket truck. The rental payments are to be made in equal monthly installments of $753 including interest at 0.60% annually, maturing on November 1, 2017. - 3,700

Capital lease for telecom truck. The rental payments are to be made in equal monthly installments of $1,143 including interest at 0.64% annually, maturing on November 8, 2018. - 30,210

Capital lease for telecom ford focus. The rental payments are to be made in equal monthly installments of $346 including interest at 0.61% annually, maturing on September 1, 2019. - 8,594

Capital lease for telecom ford E350 bucket van. The rental payments are to be made in equal monthly installments of $1,270 including interest at 19.08% annually, maturing on June 1, 2020. - 40,754

Capital lease for Burlington Telecom with Blue Water Holdings LLC. The rental payments are to be made in equal monthly installments of $46,544 including interest at 7% annually, maturing on December 30, 2034. - 5,622,088

Total capital lease obligations 2,301,048 7,319,392 Less: amount due within one year (527,824) (482,988)

Capital lease obligation, net of current portion $ 1,773,224 $ 6,836,404

Future minimum lease payments under the capital and operating leases consisted of the following as of June 30, 2017:

Fiscal Governmental Business-TypeYear Activities Activities

2018 $ 554,303 $ 918,157 2019 554,303 928,922 2020 469,254 932,750 2021 256,542 721,868 2022 256,542 721,868

Thereafter 384,805 7,409,194

Total minimum lease payments 2,475,749 11,632,759 Less amounts representing interest (174,701) (4,313,367)

Present Value of Minimum Lease Payments $ 2,301,048 $ 7,319,392

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The following is an analysis for the leased assets included in capital assets at June 30, 2017:

Governmental Business-TypeActivities Activities

Machinery, vehicles and equipment $ 2,746,202 $ 8,950,593 Less: accumulated depreciation (494,793) (568,892)

Equipment under capital leases, net $ 2,251,409 $ 8,381,701

Burlington Employees Retirement System The System is the lessee of the PTG Software System under a master capital lease entered into in fiscal year 2017. The rental payments are to be made in equal semiannual install-ments of $16,300 including interest at 2.465% annually, maturing on September 30, 2023.

Future minimum lease payments consisted of the following as of June 30, 2017:

Fiscal PensionYear System

2018 $ 32,600 2019 32,599 2020 32,599 2021 32,599 2022 32,599

Thereafter 48,899

Total minimum lease payments 211,895 Less amounts representing interest (16,695)

Present Value of Minimum Lease Payments $ 195,200

The lease payable is offset by a deposit on capital lease, as the assets were not yet placed in service as of June 30, 2017.

19. Sale-Leaseback Transaction Accounted for as a Financing Arrangement

On December 31, 2014, after receiving approval from Vermont’s Public Service Board for the transaction, the City executed a lease and other agreements with Blue Water Holdings, LLC (BWH), conveying primarily the fiber optic network and the related capital assets for a consideration of $6M to BWH and leasing back the assets to the City for BT to provide phone, internet, and cable television service to its residents and businesses under its trade name “Burlington Telecom”. Under the sale leaseback arrangement, BT began making periodic lease payments to BWH on January 31, 2015 in monthly amounts of $46,544, including interest payment of 7%, maturing on December 30, 2034. The transaction has been accounted for as a financing arrangement, wherein the right of use of the fiber optic network and the related assets (ROU) is reported on BT’s books as an intangible asset and the financing obligation in the amount of $6M is reported under capital leases payable. After the first amendment to the agreements, BT owned the capital additions and improve-ments to the ROU acquired since December 31, 2014, and therefore the transactions are accounted for as capital assets. The arrangement with BWH contemplated entering into a

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binding asset sale agreement to a third party by December 31, 2017, including both the assets owned by BWH and the capital additions and improvements acquired since December 31, 2014 by the City. An asset purchase agreement with Champlain Broadband, LLC, a subsidiary of Schurz Communications, Inc., was entered into on December 29, 2017. That transaction must be approved by the Vermont Public Utilities Commission (PUC), and a petition for approval is expected to be filed by the end of February 2018. A final closing of the sale of Burlington Telecom is expected in 2018.

20. Long-Term Obligations of Burlington School District

A. Bonds Payable

The Burlington School District has various bonds outstanding as follows (amounts include unamortized bond premium):


Maturities Interest Amount as ofSchool District: Through Rate(s) % Issued 6/30/17

General obligation bonds, net of premiums:G.O. School 2002 Series A Bonds 9/1/2022 3.00 - 4.75% 860,000 $G.O. School 2004 Refunding Series B Bonds 12/01/2016 2.00 - 3.80% 2,370,000G.O. School 2005 Series B Bonds 11/1/2025 3.25 - 4.2% 750,000G.O. School 2006 Series A Bonds 11/1/2026 3.50 - 4.00% 750,000G.O. School 2006 Series A Bonds - Athletic Field 11/1/2026 3.50 - 4.00% 3,615,000G.O. School 2007 Series A Bonds 11/1/2027 3.50 - 4.25% 750,000G.O. School 2009 Series C Bonds 11/1/2029 2.00 - 4.125% 750,000G.O. School 2009 Series C Bonds 11/1/2029 2.00 - 4.125% 2,000,000G.O. School 2010 Series A Qualified School Constr. 11/1/2026 6.50% 9,700,000G.O. School 2010 Series B Taxable GO Public Impr. 11/1/2026 6.50% 2,000,000General Improvements 2011 Series B 11/1/2031 2.00 - 4.75% 2,000,000Public Improvement Bonds 2012 Series A 6/30/2033 5.00% 3,250,000G.O. Public Improvement Bonds 2013 Series B 11/1/2033 4.00 - 6.75% 2,000,000G.O. Public Improvement Bonds 2014 Series A 11/15/2034 0.51 - 3.99% 2,000,000G.O. Public Improvement Bonds 2015 Series A 11/1/2035 5.00% 2,000,000

Subtotal School District -

Less: unamortized premuims

Total School District $ -

B. Future Debt Service

The annual payments to retire the Burlington School District’s notes payable outstand-ing as of June 30, 2017 are as follows (amounts include unamortized bond premiums):

School Total

2018 $ $ $ - 2019 - 2020 - 2021 - 2022 -

2023 - 2027 - 2028 - 2032 - 2033 - 2037 -

Total $ - $ - $ -

Principal Interest

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21. Deferred Inflows of Resources

Deferred inflows of resources are the acquisition of net position by the City that are applicable to future reporting periods. Deferred inflows of resources have a negative effect on net position, similar to liabilities. Deferred inflows of resources related to pensions are more fully described in Note 23. Governmental funds report unavailable revenue in connection with receivables for rev-enues that are not considered to be available to liquidate liabilities of the current period.

22. Governmental Funds - Balances

Fund balances are segregated to account for resources that are either not available for expenditure in the future or are legally set aside for a specific future use. The City has implemented GASB Statement No. 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions, which enhances the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying existing governmental fund type definitions. The following types of fund balances are reported at June 30, 2017: Nonspendable - This fund balance classification includes general fund reserves for pre-paid expenditures, inventory, advances to other funds, and nonmajor governmental fund reserves for the principal portion of permanent trust funds.

Restricted - This fund balance classification includes various special revenue funds, capital project unspent bond proceeds, unspent grants and the income portion of perma-nent trust funds.

Committed - This fund balance classification includes general fund encumbrances for non-lapsing, special appropriations approved at City Council meetings and various special revenue funds, including dedicated taxes.

Assigned – This fund balance classification includes general fund encumbrances athat are carried forward to its subsequent year.

Unassigned - Represents general fund amounts that may be available to be spent in future periods and deficits in other governmental funds.

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Following is a breakdown of the City's fund balances at June 30, 2017:

Nonmajor TotalGeneral Governmental Governmental

Fund Funds FundsNonspendable

Inventory and prepaid expenditures $ 441,616 $ 303,329 $ 744,945 Advances to other funds 1,383,664 - 1,383,664 Nonexpendable permanent funds - 909,230 909,230

Total Nonspendable 1,825,280 1,212,559 3,037,839

RestrictedPolice equitable sharing funds 560,372 - 560,372 Community development - 2,062,672 2,062,672 TIF waterfront - 1,901,690 1,901,690 TIF downtown - 603,180 603,180 Impact fees - 515,987 515,987 Waterfront access - 72,020 72,020 Capital improvement program - 12,365,203 12,365,203 FEMA - 66,988 66,988 Expendable permanent funds - 380,061 380,061

Total Restricted 560,372 17,967,801 18,528,173

CommittedPublic works - snow removal 250,000 - 250,000 Reappraisal 230,000 - 230,000 Library books and donations 173,467 - 173,467 Public records restoration 162,601 - 162,601 Compressed natural gas 152,871 - 152,871 Organizational study 100,000 - 100,000 CCTA and County tax 36,669 - 36,669 Plan BTV south 35,191 - 35,191 Wellness 23,960 - 23,960 Parking 23,000 - 23,000 Other committed 21,995 - 21,995 Traffic - 2,868,642 2,868,642 Dedicated taxes:

Pennies for parks - 344,355 344,355 Greenbelt - 211,559 211,559 Conservation legacy - 660,926 660,926 Bike path - 211,389 211,389

Other capital - 53,012 53,012 Total Committed 1,209,754 4,349,883 5,559,637

AssignedEncumbered for:

Permit reform 600,000 - 600,000 Health insurance consulting 500,000 - 500,000 Green revolving loan 500,000 - 500,000 Future debt payments 427,250 - 427,250 Computer aided dispatch (CAD) 350,000 - 350,000 Information technology 283,789 - 283,789 Housing trust 175,000 - 175,000 Trades inspection program 126,330 - 126,330 CEDO project manager 125,000 - 125,000 Fleet analysis 100,000 - 100,000 Attorney policy/compliance officer 75,000 - 75,000 Warming shelter pilot 60,000 - 60,000 Other assigned 296,883 - 296,883

Total Assigned 3,619,252 - 3,619,252

Unassigned 8,409,087 (4,050,554) 4,358,533 Total Unassigned 8,409,087 (4,050,554) 4,358,533

Total Fund Balance $ 15,623,745 $ 19,479,689 $ 31,484,182

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23. Retirement System

The City follows the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions with respect to the Burlington Employees’ Retirement System (the System). The System follows the provision of GASB Statement No. 67, Financial Reporting for Pension Plans.

A. Plan Description

The System is a cost sharing, single employer, defined benefit pension plan cover-ing substantially all of its employees except elective officials, other than the mayor, and the majority of the public-school teachers, who are eligible for the Vermont State Teacher's Retirement System. The plan is broken down into Class A partici-pants and Class B participants. Class A participants are composed of firemen and policemen. Class B participants include all other covered City employees. The City’s total covered payroll was $48,107,717. The System does not issue a stand-alone financial report. The System is governed by an eight-member board. The eight members include three appointed by the City Council, two Class A members of the system selected by the Class A membership, two Class B members of the system elected by the Class B membership, and the City Treasurer as an ex officio member. Of the Class A and Class B board members, no two shall be employed at the same department. The City Council has the authority to amend the benefit terms of the System by enacting ordinances and sending them to the Mayor for approval. There are 854 active members and 660 retirees or beneficiaries currently receiving benefits. Additionally, there are 376 former employees with vested rights.

B. Benefits Provided

Class A participants vest 20 percent after three years of creditable service, and 20 percent for each year thereafter until they are 100 percent vested after 7 years of creditable service. The normal benefit is payable commencing at age 55 or with 25 years of service. Class A participants who retire at or after age 55 with 7 years of creditable service are entitled to a retirement benefit, payable monthly for life, equal to 2.75 percent of their average final compensation (AFC) during the highest three non-overlapping twelve-month periods (five years for certain non-union police employees) times creditable service not in excess of 25 years plus .5 percent of the AFC times years of creditable service between 25 and 35 years, prior to age 60 and a yearly COLA based on CPI. Class A retirees could alternatively elect to choose an accrual rate of 3.25% and one-half the yearly COLA, or an accrual rate of 3.8% (3.6% for service from July 2006 forward) and no COLA. The half and no COLA options have been eliminated for new policemen hired after July 1, 2006 and new firemen hired after January 1, 2007. Also, these new hires have a 2.65 percent accrual

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rate only. Employees may retire prior to age 55 and receive reduced retirement ben-efits. Class A employees have unreduced benefits after 25 years of service, regard-less of age. All eligible City Class B employees vest 20 percent after three years of creditable service, and 20 percent for each year thereafter until they are 100 percent vested after 7 years of creditable service. Class B participants who retire at or after age 65 are entitled to a retirement benefit, payable monthly for life, equal to 1.60 percent of AFC (at age 65) during the highest three non-overlapping twelve-month periods times creditable service at age 65 not in excess of 25 years plus .5 percent of AFC times creditable service at age 65 in excess of 25 years and a yearly COLA based on the CPI. Class B retirees could alternatively elect to choose an accrual rate of 1.9% for service up to June 30, 2006 and 1.8% thereafter and one half the yearly COLA, or an accrual rate of 2.2% for service up to June 30, 2006 and 2.0% there-after and no COLA. The half and no COLA options have been eliminated for new hires after January 1, 2006 and they are only entitled to a 1.4% accrual rate. Employees may retire prior to age 65 and receive reduced retirement benefits. Creditable ser-vice or an actuarial increase is used after age 65. For Class B IBEW participants hired after October 30, 2012, the number of years used in the calculation of AFC was changed from three years to five. Also, the disability retirement was revised from 75% of pay to 66⅔% of pay. The system also provides accidental and line of duty death benefits for Class A participants, and disability and survivor income benefits for both Class A and Class B participants. The benefits are changed by negotiation and by the Retirement Board with budgetary approval by the City Council.

C. Contributions

Participants contribute a set percentage of their gross regular compensation annu-ally. Class A participants contribute 10.8% of earnable compensation for the first 35 years of creditable service, and none thereafter. Class A employees do not con-tribute to the social security retirement system. Class B participants contribute 3.0% of earnable compensation other than IBEW employees hired before May 1, 2008 who elected to contribute 4.0% of earnable compensation. The Board establishes employer contributions based on an actuarially determined contribution recommended by an independent actuary. The actuarially determined contribution is the estimated amount necessary to finance the costs of benefits earned by the System members during the year, with an additional amount to finance a portion of any unfunded accrued liability. The calculation of the actuarially deter-mined contribution is governed by the applicable provisions of the Retirement Code. It is the policy of the City of Burlington to fund, by actuarially determined periodic contributions, the normal cost of the Plan plus a provision for amortization of past service cost over a thirty (30) year period from date of establishment. The contribu-tion rate for normal cost is determined using the projected unit credit cost method

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with costs allocated based on earnings of plan members. The City funded one hun-dred percent (100%) of the annual required contribution in 2017.

D. Summary of Significant Accounting Policies

Basis of Accounting - For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the System and additions to/deductions from System’s fiduciary net position have been determined on the same basis as they are reported by System. For this purpose, benefit pay-ments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Basis of Presentation - The System is operated on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. The preparation of the statements requires management to make a number of estimates and assump-tions relating to the reported amounts. Due to the inherent nature and uncertainty of these estimates, actual results could differ, and the differences may be material. Method Used to Value Investments - Investments are reported at fair value.

E. Actuarial Assumptions

The total actuarially determined contribution to the system for 2016 was $9,149,159. A summary of the actuarial assumptions as of the latest actuarial valuation is shown below:

Valuation Date June 30, 2016Actuarial cost method Entry Age Normal - Level

Percentage of Pay

Actuarial assumptions:Investment rate of return 8.0%Inflation rate 3.0%Projected salary increases 3.8 - 8.8%Post-retirement cost-of-living adjustment Increases averaging 3.0% per

year were assumed

Actuarial valuation of the ongoing System involves estimates of the reported amounts and assumptions about probability of occurrence of events far into the future. Examples include assumptions about future employment mortality and future salary increases. Amounts determined regarding the net pension liability are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The actuarial assumptions used in the June 30, 2016 valuation were based on the results of the most recent actuarial experience study for the five year period ending June 30, 2012.

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Mortality rates were based on the RP-2000 Combined Mortality tables for Males and Females projected to 2017 with scale AA; RP-2000 Disability Mortality Table projected with scale AA to 2017 for the period after disability retirement, and prior to the state of the service retirement benefit.

F. Net Pension Liability

The components of the net pension liability (i.e., the retirement system’s liability determined in accordance with GASB No. 67 less the fiduciary net position) as of June 30, 2016, is shown below:

Total pension liability $ 245,943,279

System fiduciary net position (156,789,373)

Net Pension Liability $ 89,153,906

Primary government $ 76,789,110 Discretely presented component unit 12,364,796

Total Net Pension Liability $ 89,153,906

System fiduciary net position as a percentage of the total pension liability 63.75%

Actuarial valuation of the ongoing System involves estimates of the reported amounts and assumptions about probability of occurrence of events far into the future. Examples include assumptions about future employment mortality and future salary increases. Amounts determined regarding the net pension liability are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Employers’ Net Pension Liability presents multi-year end information about whether the plan fiduciary net positions are increasing or decreasing over time relative to the total pension liabil-ity. These schedules are presented in the Required Supplementary Information sec-tion. The Total Pension Liability as of June 30, 2016, is based on the results of an actuarial valuation date of June 30, 2016, and rolled-forward using generally accepted actuarial procedures. Target Allocations – The long-term expected rate of return on pension plan invest-ments was selected from a best estimate range determined using the building block approach. Under this method, an expected future real return range (expected returns, net of pension plan investment expense and inflation) is calculated separately for each asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return net of investment expenses by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major class are summarized in the following table:

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Long-termExpected

Target Asset Real rateAsset Class Allocation of Return

US Large Cap 30.09% 7.16%US Mid Cap 8.99% 9.04%US Small Cap 8.99% 9.03%MSCI EAFE 9.31% 5.61%MSCI Emerging Markets 10.40% 8.22%Intermediate Government Credit 27.74% 1.72%Real Estate 2.08% 6.63%Private Equity 1.56% 8.31%Cash 0.84% 0.86%

Discount Rate – The discount rate used to measure the total pension liability was 8%. The projection of cash flows used to determine the discount rate assumed that contributions will continue to be made in accordance with the current funding pol-icy. Based on those assumptions, the pension plan’s fiduciary net position was pro-jected to be available to make all projected future benefit payments to current System members. Therefore, the long-term expected rate of return on pension plan invest-ments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The fol-lowing presents the System’s net pension liability calculated using the discount rate of 8 percent, as well as what the System’s net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (7%) or 1 percentage-point higher (9%) than the current rate:

1% Decrease(7.00%)

Current Discount Rate

(8.00%)1% Increase

(9.00%)

Primary government $ 101,916,867 $ 76,789,110 $ 55,789,190 Discretely presented component unit 16,410,937 12,364,796 8,983,330

Total Net Pension Liability $ 118,327,804 $ 89,153,906 $ 64,772,520

G. Deferred Outflows and Inflows of Resources

For the year ended June 30, 2017, the City recognized pension expense of $5,368,337 and the School District recognized pension expense of $_____. In addition, the City

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reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows of Resources

Deferred Inflows of Resources

Primary Government:

Fiscal year 2017 deferred pension contributions $ 7,979,499 $ -

Changes in proportional share of contributions 1,584,653 (1,855,260)

Difference between expected and actual pension experience 6,278,154 -

Difference between projected and actual investment earnings 17,312,946 (2,761,940)

Total Primary Government(1) 33,155,252 (4,617,200)

Discretely Presented Component Unit:

Fiscal year 2017 deferred pension contributions -

Changes in proportional share of contributions 619,661 (349,054)

Difference between expected and actual pension experience 1,010,926 -

Difference between projected and actual investment earnings 2,787,779 (444,735)

Total Discretely Presented Component Unit 4,418,366 (793,789)

Total $ 37,573,618 $ (5,410,989)

(1) Gross amounts are reported in the note. Burlington Electric amounts are netted on the Statements of Net Position.

Deferred outflows of resources related to pension resulting from contributions sub-sequent to the measurement date will be recognized in pension expense in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Deferred Outflows/

(Inflows) of Resources

Year ended June 30:

2018 $ 6,003,461 2019 5,654,408 2020 6,331,491 2021 2,569,193

Total Primary Government 20,558,553

Year ended June 30:

2018 887,126 2019 1,236,180 2020 1,087,574 2021 413,697

3,624,577

Total $ 24,183,130

Total Discretely Presented Component Unit

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H. Rate of Return

For the year ended June 30, 2016, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expenses, was negative 1.30%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

24. Post-Employment Healthcare and Life Insurance Benefits

Other Post-Employment Benefits GASB Statement 45, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other Than Pensions, requires governments to account for other post-employment benefits (OPEB), primarily healthcare, on an accrual basis rather than on a pay-as-you-go basis. The effect is the recognition of an actuarially required con-tribution as an expense on the Statement of Activities when a future retiree earns their post-employment benefits, rather than when they use their post-employment benefit. To the extent that an entity does not fund their actuarially required contribution, a post-employment benefit liability is recognized on the Statement of Net Position over time. Information about the Burlington School District’s OPEB Plan and Obligation can be found in their basic financial statements.

A. Plan Description

In addition to providing the pension benefits described, the City provides post-employment healthcare and life insurance benefits for retired employees through the City and School’s plan. There are 699 active members and 33 retirees and bene-ficiaries as of June 30, 2015, the date of the last actuarial valuation. In addition, the City allows certain retired employees to purchase health insurance through the City at the City’s group rates. GASB No. 45 recognizes this as an implied subsidy and requires accrual of this liability.

B. Benefits Provided

The City provides medical, prescription drug, mental health/substance abuse and life insurance to retirees and their covered dependents. All active employees who retire from the City and meet the eligibility criteria may receive these benefits.

C. Funding Policy

Retirees contribute various amounts of the cost of the health plan, as determined by the City. The City contributes the remainder of the health plan costs on a pre-funded basis.

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D. Annual OPEB Costs and Net OPEB Obligation

The City’s fiscal 2017 annual OPEB expense is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost per year and amortize the unfunded actuarial liability over a period of thirty years. The City has elected not to pre-fund OPEB liabilities. The following table shows the components of the City’s annual OPEB cost for the year ending June 30, 2017, the amount actually contributed to the plan, and the change in the City’s net OPEB obligation based on an actuarial valuation as of June 30, 2016 for the City.

Annual Required Contribution (ARC) $ 335,996 Interest on net OPEB obligation 69,907 Adjustment to ARC (58,256)

Annual OPEB cost 347,647 Contributions made (136,540)

Increase in net OPEB obligation 211,107 Net OPEB obligation - beginning of year 1,747,675

Net OPEB obligation - end of year $ 1,958,782

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation were as follows:

Fiscal Year Ended

Annual OPEBCost

Percentage of OPEB

Cost ContributedNet OPEBObligation

2017 $ 347,647 39.3% 1,958,782 2016 343,117 36.5% $ 1,747,675 2015 325,681 66.3% 1,529,910 2014 442,314 86.2% 1,420,191 2013 335,169 108.3% 1,359,145 2012 365,319 32.4% 1,387,098 2011 345,427 34.3% 1,140,113 2010 324,800 0.8% 913,000

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E. Funded Status and Funding Progress

The funded status of the plan as of June 30, 2015, the date of the most recent actu-arial valuation was as follows:

Actuarial accrued liability (AAL) $ 3,778,744 Actuarial value of plan assets -

Unfunded actuarial accrued liability (UAAL) $ 3,778,744

Funded ratio (actuarial value of plan assets/AAL) 0%

Covered payroll (active plan members) $ 36,668,126

UAAL as a percentage of covered payroll 10.3%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amount and assumptions about the probability of occurrence of events far into the future. Examples included assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the Notes to the Financial Statements, pre-sents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabili-ties for benefits.

F. Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the plan as understood by the City and the plan members and include the types of benefits pro-vided at the time of each valuation and the historical pattern of sharing of benefit costs between the City and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatil-ity in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the June 30, 2015 City actuarial valuation, the projected unit credit cost method was used. The actuarial value of assets was not determined as the City has not advance funded its obligation. The actuarial assumptions included a 4% investment rate of return, which assumes an inflation rate of 3.00% and a real rate of return of 1.0%, and an initial annual healthcare cost trend rate of 8%, which decreases to a 5% long-term rate for all healthcare benefits after six years for the City. The amortization costs for the initial UAAL is a level percentage of payroll for a period of 30 years, on an open basis. This has been calculated assuming the amortization payment increases at a rate of 4%.

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25. Commitments and Contingencies

A. Burlington International Airport Mansfield Heliflight, Inc. v. City of Burlington, Vermont On or around July 29, 2014, Mansfield Heliflight, Inc. (“Mansfield”) filed a Part 16 Complaint with the FAA against the City, alleging the City has prevented Mansfield from becoming a Fixed-Base Operator (“FBO”) at BTV, and that its efforts in this regard effectively granted an exclusive right to Heritage Aviation, Inc. On September 5, 2017, the FAA dismissed the complaint and found that the Airport had not violated its grant assurances. The FAA did make some recommendations, including that the City issue a request for proposals to select a second qualified FBO. However, Mansfield Heliflight has appealed, and the appeal is being briefed. The City believes that Mansfield’s claims are without merit. Other Claims

The City has been sued along with United Airlines for an injury suffered by a pas-senger who slipped and fell on ice on the jet bridge. Messier v. United Airlines and City of Burlington. That claim is being defended by insurance defense counsel, and monetary damages are still unspecified. A claim has been made for a slip and fall on ice in April 2015, but no lawsuit has yet been filed on that claim. Currently, insurance has been handling the claim, and it is expected that insurance defense counsel will be retained if a suit is filed. The City does not believe that any of the above-referenced matters will have a material, adverse effect upon the financial position of the Fund. Construction Commitments

The Airport has a number of ongoing Airport Improvement Program (AIP) projects for construction and land acquisition as well as several Passenger Facility Program (PFC) projects for terminal improvements that are funded from restricted assets. AIP projects include taxiway reconstruction, storm-water treatment projects, building demolition related to previously acquired property and land acquisition. The PFC projects include energy projects, cargo apron reconstruction, escalator and baggage carousel projects and related work. Grants Amounts received or receivable from grantor agencies, including possible grant assurance violations at the Fund, are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount of expenditures which may be disallowed by the grantor cannot be deter-mined at this time, although the Fund expects such amounts, if any, to be immaterial.

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B. Electric Department Commitments and Contingencies

The Burlington Electric Department (BED) receives output from generation of the McNeil Station (of which the BED is the 50% owner and operator), the Burlington Gas Turbine, the Winooski One hydro facility, the Airport Solar array, and the Pine Street Solar array. Except for the McNeil station, the BED owns 100% of the remain-ing resources and is responsible for their operation. In addition to energy provided by its owned generation, BED purchases a portion of its electricity requirements pursuant to long-term (greater than one year in dura-tion) contracts. During the fiscal year ended June 30, 2017 and 2016, long-term sources of purchased power included:

New York Power Authority (NYPA) power from hydro stations on the Niagara

and St. Lawrence rivers under contracts through September 1, 2025 (Niagara) and through April 30, 2017 (St. Lawrence). Renewal discussions for the St. Lawrence river contract are underway.

Vermont Electric Power Producers, Inc. (VEPP) which is agent for 11 hydro facilities located within Vermont (contracts expire between 2016 and 2020).

Deliveries pursuant to a ten-year contract with Vermont Wind commenced in September 2011 (for test energy), with the official ten-year contract start date being October 19, 2011 when commercial energy production began. Under the contract, BED receives 16 MW (40%) of Vermont Wind’s wind farm in northeast Vermont (Sheffield). BED’s 16 MW entitlement is expected to provide approximately 9.5% of BED’s annual energy requirements.

BED purchases energy from the Georgia Mountain Community Wind (GMCW) project with commercial operation on December 31, 2012. Pur-suant to a 25-year contract, BED receives 10MW (100%) entitlement from Georgia Mountain’s wind farm in Milton/Georgia, Vermont. GMCW is expected to produce energy sufficient to meet 9.2% of BED s energy needs.

Deliveries pursuant to a ten-year contract with Hancock began in December 2016. Before reaching commercial operation, the BED received test energy for the month of November and partial month of December. Under the contract, BED will receive 13.5 MW (26.5%) of Hancock’s wind farm.

Long-term purchases from a number of small in-state resources under a state mandated feed-in tariff program (called Standard Offer resources). Effec-tive January 1, 2017, BED was exempted from purchasing energy from these high-priced resources (in recognition of its 100% renewable energy purchases). BED expects this exemption to continue through at least 2018.

Purchase of the output from 6 small in-city solar projects under long-term agreements.

BED is purchasing energy and Renewal Energy Credits (RECs) from Nextera for a 5-year period beginning January 1, 2013. For calendar year 2013 and 2014, hourly energy was 10 MW, for the final 3 years (calendar 2015 –

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2017), the volume is 5 MW per hour. The delivered energy is unit contingent on a portfolio of hydro facilities, and includes RECs from those units equal in volume to the energy purchased.

The Burlington City Council, the Vermont Public Service Board, and the voters of Burlington have approved a 23-year energy-only contract with Hydro-Quebec. The contract was executed and deliveries began (for BED) in November 2015. Under the contract, BED will receive 5 MW of contract energy for the period November 1, 2015 to October 31, 2020 and a second (additional) 4 MW of contract energy for the period November 1, 2020 to October 31, 2038. BED’s entitlement is expected to provide approximately 6%-15% of BED’s annual energy requirements depending on whether one, or both, contract entitlements are flowing in a particular year.

In 2013, BED entered a long-term power agreement to purchase the output of a proposed 2.5 MW solar generating facility to be located in Burlington (South Forty Solar). On September 7, 2017, BED was notified that all pre-construction conditions had been met and that construction would be commencing.

Payments under these long-term power supply contracts were $14,495,724 and $12,632,234 for the years ended June 30, 2017 and 2016, respectively, with the increase from 2016 being largely due to new wind contract with Hancock Wind. Budg-eted commitments under these long-term contracts and long-term contracts approved and executed for future delivery periods total approximately $71,700,219 for the 5-year period from July 1, 2017 to June 30, 2022.

BudgetedFiscal Year Commitment

2018 $ 14,056,042 2019 13,820,631 2020 15,034,772 2021 16,119,018 2022 12,669,756

$ 71,700,219

The remainder of BED’s energy requirement is satisfied through short-term pur-chases including:

Short-term purchases from a number of market counterparties.

Net exchange of energy through the Independent System Operator New England power markets.

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The costs of power purchased under these contracts are accounted for as purchase power expenses in the statements of revenues, expenses, and changes in net posi-tion. The percentages of the Department’s total energy requirements were provided as follows:

2017

McNeil Generating Station and Gas Turbine 39%Winooski One 8%New York Power Authority 5%Vermont Electric Power Producers 2%Standard Offer 1%Wind Production 25%Hydro-Quebec 8%Nextera 12%

Total 100%

Note that the BED sells Renewable Energy Credits (RECs) associated with much of the above generation and the above table should not be considered a representa-tion of the BED’s renewability.

C. Other Funds’ Commitments and Contingencies

Grant Programs The City participates in a number of federally assisted grant programs. These programs are subject to program compliance audits by the grantors or their representatives. The audits of these programs for, or including, the year ended June 30, 2017 have not yet been conducted. Accordingly, the City’s compliance with grant application requirements will be established at some future date. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. Refunds The City has become aware of an error in the installation of a limited number of electronic meter reading devices. The error had an impact on a number of commercial accounts, and may have resulted in inaccurate reporting of actual usage for such meters. The City has implemented steps to correct such error and is continuing, with an outside consultant, to investigate the exact impact on the water and wastewater funds. The estimate of this one-time extraordinary charge to the City’s water and wastewater enterprise funds is currently estimated to be approximately $2,000,000, but may be lower or greater depending upon com-pletion of the City’s review. The City does not expect such extraordinary expense to adversely impact the City’s ability to meet its respective rate covenants for the City’s outstanding water and wastewater revenue bonds. The effect of the

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billing adjustments on the fiscal year 2017 overbilling is reported as refunds payable. The remaining amount will be accrued once the amount is determined.

D. General Commitments and Contingencies The City has several claims for which the insurance carriers have issued a reser-vation of rights. The City is not able to assess the likelihood or the amount, if any, of an unfavorable outcome on these cases at this time.

Insurance Reserves Starting fiscal year 2016, the City has a large-deductible worker’s compensation plan with Travelers Indemnity Company and maintains a fund in its budget to cover claims as they occur up to the insurance limit. Prior to fiscal year 2016, the City was self-insured for worker’s compensation. Hickok & Boardman, the City’s insurance agent, provides the City with data estimating reserve develop-ment of prior year claims. The City’s claim reserve estimates are not created by an external actuary but are heavily based in actuarial concepts. Travelers Indemnity Company acts as the third-party administrator to process, pay, and administer the claims after which they bill the City for reimbursement. The City has an irrevocable standby letter of credit with the Travelers Indemnity Company as beneficiary in the amount of $1,800,000 to secure the payment of claims. The City is self-insured for health insurance. The Plan is administered by a third-party administrator that is responsible for approval, processing and payment of claims, after which they bill the City for reimbursement. The City has reinsur-ance for individual claims in excess of $130,000 and for aggregate stop loss of 125% of projected claims for the 2012 policy year. The City also self-insures for dental insurance. This plan is administered by a third-party administrator that is responsible for approval, processing and pay-ment of claims, after which they bill the City for reimbursement. Each covered employee is guaranteed $1,500 of paid claims per year after which the employee must pick up any excess costs. The costs associated with these self-insurance plans are budgeted in the General Fund and allocated to other funds based on the following:

Type Allocation MethodWorker's Compensation 50% Experience and 50% Exposure Health Number of Employees and Levels of Coverage Dental Actual Claims and Administration Fees Paid

At June 30, 2017, the City has recorded an estimated liability of $929,364 in the General Fund, which represents the short term payable for health claims as of June 30, 2017. A long-term reserve liability of $1,143,394 is included for claims incurred but not reported on the governmental statement of net position.

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This consists of $1,130,395 for workers’ compensation claims and $13,499 for dental claims incurred on or before June 30, 2017, but not paid by the City as of that date. Settled claims resulting from insured risks have not exceeded coverage in the past three fiscal years. The City has elected to pay actual unemployment claims instead of enrolling in an unemployment insurance program. No liabilities have been accrued as the City is not able to make an estimate as to any future costs.

26. Deferred Compensation

The City also offers its employees two deferred compensation plans in accordance with Internal Revenue Code Section 457 through the International City/County Management Association’s (ICMA) Retirement Corporation and Nationwide Retirement Solutions. The plans permit employees to defer a portion of their salary until future years. Deferred compensation is not available to employees until termination, retirement, or death. The City has no liability for losses under the plans, but does have the duty of due care that would be required of an ordinary prudent inventor.

27. Subsequent Events

Subsequent to year-end, the City issued the following debt: Approximate

Interest MaturityAmount Rate Date

Governmental Activities:G.O. Public Improvement Bond 2016 Series B - City $ 2,200,000 4.5% 11/1/2036G.O. Obligation TIF Bond 2017 Series D - City 3,745,000 4.0% 11/1/2035

Business-Type Activities:G.O. Public Improvement Bond 2016 Series B - Electric 3,300,000 4.5% 11/1/2036Revenue Refunding Bond 2017 Series A - Electric 4,010,000 4.5% 7/1/2031Revenue Refunding Bond 2017 Series D - Electric 5,410,000 4.5% 4/1/2031

Component Unit - Burlington School District:G.O. Public Improvement Bond 2016 Series B - School 2,200,000 4.5% 11/1/2036

Total $ 20,865,000

Sale of Burlington Telecom On December 31, 2017, the City sold Burlington Telecom to a third party. Details of the Sale are outlined in Note 19.

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28. Beginning Fund Balance/Net Position Restatement

The City implemented GASB 80, Blending Requirements for Certain Component Units, effective fiscal year 2017. The City is the sole corporate member of a non-for-profit organization, Burlington Community Development Corporation (BCDC) and guarantees BCDC’s debt. Therefore, the beginning (July 1, 2016) fund balance/net position of the City has been restated as follows:

As previously reported, June 30, 2016 $ 88,227,484 $ 14,980,622

Due to GASB 80, BCDC was reclassified from a discretely presented component unit to a nonmajor special revenue fund. 1,350,129 (1,350,129)

As restated, July 1, 2017 $ 89,577,613 $ 13,630,493

Government-Wide Financial Statements:

GovernmentalActivities

Discretely Presented

Component Units

Fund Basis Financial Statements:

As previously reported, June 30, 2016 $ 12,148,380

Due to GASB 80, BCDC was reclassified from a discretely presented component unit to a nonmajor special revenue fund, as converted from accrual to modifed accrual basis. 17,299

As restated, July 1, 2017 $ 12,165,679

Nonmajor Governmental

Funds

29. Implementation of New GASB Standard

The Governmental Accounting Standards Board (GASB) has issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions, replacing requirements of Statements No. 45 and 57, effective for the City beginning with its year ending June 30, 2018. This Statement establishes standards for recogniz-ing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. In addition, this Statement details the recognition and disclosure requirements for employers with payables to defined benefit OPEB plans that are administered through trusts that meet the specific criteria and for employers whose employees are provided with defined contribution OPEB.

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REQUIRED SUPPLEMENTARY INFORMATION

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117

Proportion Proportionateof the Share of the

Fiscal Measurement Net Pension Net PensionYear Date Liability Liability Covered Payroll

June 30, 2017 June 30, 2016 100.00% $89,153,906 48,107,717$ June 30, 2016 June 30, 2015 100.00% $68,164,434 44,765,172$ June 30, 2015 June 30, 2014 100.00% $53,829,773 45,788,172$

See Independent Auditors' Report.


SCHEDULE OF PROPORTIONATE SHAREOF THE NET PENSION LIABILITY

JUNE 30, 2017(Unaudited)

Proportionate Share of the Plan Fiduciary Net Position

EMPLOYEES' RETIREMENT SYSTEM

(A Component Unit of the City of Burlington, Vermont)

REQUIRED SUPPLEMENTAL INFORMATION

Net Pension Liability as a Percentage of the Total Percentage of Covered Payroll Pension Liability

Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.

185.32% 63.75%152.27% 70.35%117.56% 75.31%

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Contributions inRelation to the

Contractually Contractually Contribution Contributions asFiscal Required Required Deficiency Covered a Percentage ofYear Contribution Contribution (Excess) Payroll Covered Payroll

June 30, 2017 9,149,159$ 9,149,159$ -$ 48,107,717$ 19.02%June 30, 2016 8,840,768$ 8,840,768$ -$ 44,765,172$ 19.75%June 30, 2015 8,920,879$ 8,920,879$ -$ 45,788,172$ 19.48%




SCHEDULE OF PENSION CONTRIBUTIONS

JUNE 30, 2017(Unaudited)


EMPLOYEES' RETIREMENT SYSTEM


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2017 2016 2015Total Pension Liability

Service $ 5,327,448 $ 5,915,439 $ 5,314,021 Interest on unfunded liability - time value of $ 18,268,523 17,419,148 16,598,877 Changes of benefit terms (414,295) (3,167,853) - Differences between expected and actual experience 6,852,487 4,312,195 - Changes of assumptions - - - Benefit payments, including refunds of member contributions (13,971,175) (12,602,652) (11,932,108)

Net change in total pension liability 16,062,988 11,876,277 9,980,790

Total pension liability - beginning 229,880,291 218,004,014 208,023,224

Total pension liability - ending (a) $ 245,943,279 $ 229,880,291 $ 218,004,014

Plan Fiduciary Net PositionContributions - employer $ 9,149,159 $ 8,840,768 $ 8,920,879 Contributions - member 2,304,971 2,167,652 2,148,842 Net investment income (2,088,531) (557,357) 19,625,825 Benefit payments, including refunds of member contributions (13,971,175) (12,602,652) (11,932,108) Administrative expense (320,908) (306,795) (253,796) Other - - 5,927

Net change in plan fiduciary net position (4,926,484) (2,458,384) 18,515,569

Plan fiduciary net position - beginning 161,715,857 164,174,241 145,658,672

Plan fiduciary net position - ending (b) $ 156,789,373 $ 161,715,857 $ 164,174,241

Net pension liability (asset) - ending (a-b) $ 89,153,906 $ 68,164,434 $ 53,829,773

Schedule of Investment Returns

Annual money weighted rate of return, net of investment expense -1.30% -0.15% 13.62%




June 30, 2017(Unaudited)

CITY OF BURLINGTON, VERMONTEMPLOYEES' RETIREMENT SYSTEM


SCHEDULE OF CHANGES IN THEEMPLOYERS' NET PENSION LIABILITY

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Actuarial UAAL asAccrued a Percent-

Actuarial Liability Unfunded age ofActuarial Value of (AAL) - AAL Funded Covered CoveredValuation Assets Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

6/30/2015 $ - $ 3,778,744 $ (3,778,744) 0.0% $ 36,668,126 10.3%6/30/2013 $ - $ 3,862,554 $ (3,862,554) 0.0% $ 36,346,808 10.6%6/30/2011 $ - $ 3,920,235 $ (3,920,235) 0.0% $ 34,624,868 11.3%6/30/2009 $ - $ 3,593,453 $ (3,593,453) 0.0% $ 33,073,193 10.9%

7/1/2015 $ - $ 5,503,193 $ (5,503,193) 0.0% $ 32,092,393 17.1%7/1/2014 $ - $ 2,678,711 $ (2,678,711) 0.0% $ 35,454,720 7.6%7/1/2012 $ - $ 2,365,074 $ (2,365,074) 0.0% $ 30,358,375 7.8%7/1/2010 $ - $ 2,257,751 $ (2,257,751) 0.0% $ 28,831,983 7.8%7/1/2008 $ - $ 3,891,509 $ (3,891,509) 0.0% $ 24,767,727 15.7%


Discretely Presented Component Unit - School District

City Plan

Other Post-Employment Benefits


SCHEDULE OF OPEB FUNDING PROGRESS

REQUIRED SUPPLEMENTARY INFORMATION

June 30, 2017(Unaudited)

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SUPPLEMENTARY STATEMENTS AND SCHEDULES

122


123

Combining Financial Statements and

Other Supplementary Schedules

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NON-MAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS

Special Revenue Funds are established to account for resources obtained and expended for specific purposes and restricted by law or local action. Traffic: The Traffic Division provides planning, engineering, operations, and maintenance

of the traffic signs, markings, and signals that allow the transportation system to operate safely and efficiently for all modes of travel. Traffic also owns and operates 1,612 public parking spaces in three parking structures downtown; 1,080 on street parking meters; and 176 metered parking spaces in six surface lots.

Community and Economic Development: The Community and Economic Development Office (CEDO) works with the community to foster economic vitality, preserve and enhance neighborhoods, improve the quality of life and the environment, and promote equity and opportunity for all residents of Burlington.

Tax Increment Financing - Waterfront: The Waterfront TIF fund is utilized for enhancing public infrastructure and making the waterfront area more accessible and vibrant.

Tax Increment Financing - Downtown: The Downtown TIF fund is utilized for enhancing public infrastructure in the Downtown District, including structured parking, utility upgrades and renovations, and streetscape improvements.

Church Street Marketplace: Church Street Marketplace manages the public right of way for a four-block pedestrian mall and business improvement district. This includes mainte-nance, marketing and administrative services.

Impact Fees: Impact fees are assessed against new development to help offset the costs of new infrastructure required by the City’s growth. These funds are restricted for the use of capital improvement projects.

Dedicated Taxes: The City of Burlington has several voter-approved dedicated taxes to be utilized for parks and tree upgrades, conservation of open space, assistance with building of affordable housing, and upgrades to the Cities streets.

Community Development Corporation (BCDC): The organization’s primary purpose is to carry out the industrial and economic development within the City. As such, the purposes of the Corporation include fostering, encouraging and assisting the physical location of business enterprises in the Greater Burlington area and otherwise fulfilling the purposes of a “local development corporation”.

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CAPITAL PROJECT FUNDS Capital Project funds are established to account for resources obtained and expended for the acquisition of major capital facilities or equipment. Champlain Parkway: This fund is used to account for the construction of a new City street

from I89 to the City's center.

Waterfront Access: This fund is used to account for access improvements to waterfront and college streets including a new road and skate park.

Capital Improvement Program: This fund is used to account for our Capital Street program utilizes dedication tax funding to replace City Street infrastructure.

Traffic Capital: This fund is used to account for multi-year capital investment in parking infrastructure improvements.

Wayfinding: This fund is used to account for the creation of new directional signage includ-ing gateway, downtown, parking facilities, destination, recreation, and education directional.

FEMA: This fund is used to account for Federal Emergency Management funding for declared emergencies including the 2012 Spring flooding.

Parks: This fund is used to account for the parks department dedicated funding for parks and waterfront improvements.

Downtown Westlake: This fund is used to account for funding for a two-story parking struc-ture to service area hotel users.

Great Streets: This fund is used to account for specific development improvements to the City’s downtown core which includes Streetscape Upgrades to: Main Street, St. Paul Street, and the Market Street garage improvements/repairs.

Other: This fund is used to account for Other Projects that are over $50,000 and cross multiple fiscal years.

PERMANENT FUNDS

Permanent funds are established to account for certain assets held by the Town in a fiduciary capacity as trustee. Cemetery: This fund is used to account for the sale of endowments and interest for main-

tenance of cemetery.

Loomis Library: This fund is used to account for a bequest by Horatio G Loomis in 1902 and interest to be used by Fletcher Free Library.

Lolita Deming Estate: This fund is used to account for a bequest from L. Deming 1972 for use by parks department for the removal and planting of trees.

Mary E. Waddell: This fund is used to account for a bequest of M. Waddell in 1988 to be used for planting flowers in public flower beds.

WEZF 93 FM DARE: This fund is used to account for contributions by Norman Knight Charitable Foundation to assist police department with DARE Program.

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Communityand Economic TIF TIF

Traffic Development Waterfront Downtown

ASSETS

Cash and short-term investments $ 3,021,966 $ 2,200,631 $ 1,943,230 $ 603,180 Investments - - - - Receivables, net of allowance:

Departmental and other 51,832 - - - Intergovernmental - 1,202,393 - - Loans - 4,778,508 - - Capital lease - - - - Accrued interest - 1,270,411 - -

Advances to other funds - - - - Inventory 303,329 - - - Other current assets 123 2,143 - -

Total Assets $ 3,377,250 $ 9,454,086 $ 1,943,230 $ 603,180

Liabilities:Accounts payable $ 155,982 $ 290,983 $ - $ - Intergovernmental payable - - 41,540 - Accrued payroll and benefits payable 26,367 42,231 - - Accrued liabilities - 4,362 - - Unearned revenue - 94,781 - - Line of credit - - - - Due to other funds - - - - Advances from other funds - 245,183 - - Other liabilities - - - -

Total Liabilities 182,349 677,540 41,540 -

Deferred Inflows of Resources:Unavailable revenues 22,930 6,713,874 - -

Fund Balances:Nonspendable 303,329 - - - Restricted - 2,062,672 1,901,690 603,180 Committed 2,868,642 - - - Unassigned - - - -

Total Fund Balances 3,171,971 2,062,672 1,901,690 603,180

Total Liabilities. Deferred Inflows of Resources and Fund Balances $ 3,377,250 $ 9,454,086 $ 1,943,230 $ 603,180

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

Special Revenue Funds


Combining Balance Sheet

Nonmajor Governmental Funds

June 30, 2017

127

Church CommunityStreet Impact Dedicated Development

Marketplace Fees Taxes Corporation Subtotals

$ 42,097 $ 615,009 $ 1,428,229 $ 32,210 $ 9,886,552 - - - - -

33,481 - - - 85,313 - - - - 1,202,393 - - - 721,780 5,500,288 - - - 733,438 733,438 - - - - 1,270,411 - - - - - - - - - 303,329 - - - - 2,266

$ 75,578 $ 615,009 $ 1,428,229 $ 1,487,428 $ 18,983,990

$ 16,075 $ 72,885 $ - $ - $ 535,925 - - - - 41,540

13,539 - - - 82,137 - 26,137 - - 30,499

49,553 - - 78,000 222,334 - - - - - - - - - - - - - 221,588 466,771 - - - - -

79,167 99,022 - 299,588 1,379,206

- - - 1,233,629 7,970,433

- - - - 303,329 - 515,987 - - 5,083,529 - - 1,428,229 - 4,296,871

(3,589) - - (45,789) (49,378)

(3,589) 515,987 1,428,229 (45,789) 9,634,351

$ 75,578 $ 615,009 $ 1,428,229 $ 1,487,428 $ 18,983,990

(continued)


128

(continued)

CapitalChamplain Waterfront Improvement TrafficParkway Access Program Capital Wayfinding FEMA

ASSETS

Cash and short-term investments $ 112,298 $ 138,748 $ 13,493,573 $ - $ - $ 66,988 Investments - - - - - - Receivables, net of allowance:

Departmental and other - 280,141 - - - - Intergovernmental 316,061 - 170,606 - 5,079 - Loans - - - - - - Capital lease - - - - - - Accrued interest - - - - - -

Advances to other funds - - - - - - Inventory - - - - - - Other current assets - - - - - -

Total Assets $ 428,359 $ 418,889 $ 13,664,179 $ - $ 5,079 $ 66,988

Liabilities:Accounts payable $ 179,047 $ 66,728 $ 992,724 $ 885,658 $ 794 $ - Intergovernmental payable - - 234,832 - - - Accrued payroll and benefits payable - - 3,165 - - - Accrued liabilities - - - - - - Unearned revenue - - - - - - Line of credit - - - 2,106,123 - - Due to other funds - - - 94,856 - - Advances from other funds 144,858 - - - 13,111 - Other liabilities - - - - - -

Total Liabilities 323,905 66,728 1,230,721 3,086,637 13,905 -

Deferred Inflows of Resources:Unavailable revenues 249,312 280,141 68,255 - 4,091 -

Fund Balances:Nonspendable - - - - - - Restricted - 72,020 12,365,203 - - 66,988 Committed - - - - - - Unassigned (144,858) - - (3,086,637) (12,917) -

Total Fund Balances (144,858) 72,020 12,365,203 (3,086,637) (12,917) 66,988

Total Liabilities. Deferred Inflows of Resources and Fund Balances $ 428,359 $ 418,889 $ 13,664,179 $ - $ 5,079 $ 66,988

(continued)

,OF RESOURCES, AND FUND BALANCES

Capital Project Funds

129

LolitaDowntown Great Loomis Deming

Parks Westlake Streets Other Subtotals Cemetery Library Estate

$ 226,914 $ 2,159 $ 30,032 $ 199,838 $ 14,270,550 $ 199 $ 10,948 $ 11,242 - - - - - 1,250,780 - -

- - - - 280,141 - - - - - - - 491,746 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 221,588 - - 221,588 - - - - - - - - - - - - - - - - - - -

$ 226,914 $ 223,747 $ 30,032 $ 199,838 $ 15,264,025 $ 1,250,979 $ 10,948 $ 11,242

$ 219,794 $ - $ 30,031 $ 25,000 $ 2,399,776 $ - $ - $ - - - - - 234,832 - - -

7,120 - - - 10,285 - - - - - - 20,873 20,873 - - - - - - - - - - - - - - - 2,106,123 - - - - - - - 94,856 - - -

448,785 234,879 296,848 - 1,138,481 - - - - - - 100,953 100,953 - - -

675,699 234,879 326,879 146,826 6,106,179 - - -

- - - - 601,799 - - -

- - - - - 894,796 10,948 2,486 - - - - 12,504,211 356,183 - 8,756 - - - 53,012 53,012 - - -

(448,785) (11,132) (296,847) - (4,001,176) - - -

(448,785) (11,132) (296,847) 53,012 8,556,047 1,250,979 10,948 11,242

$ 226,914 $ 223,747 $ 30,032 $ 199,838 $ 15,264,025 $ 1,250,979 $ 10,948 $ 11,242

(continued)

Permanent FundsCapital Project Funds

130

(continued)

WEZF NonmajorMary E. 93 FM GovernmentalWaddell DARE Subtotals Funds

ASSETS

Cash and short-term investments $ 13,886 $ 2,236 $ 38,511 $ 24,195,613 Investments - - 1,250,780 1,250,780 Receivables, net of allowance:

Departmental and other - - - 365,454 Intergovernmental - - - 1,694,139 Loans - - - 5,500,288 Capital lease - - - 733,438 Accrued interest - - - 1,270,411

Advances to other funds - - - 221,588 Inventory - - - 303,329 Other current assets - - - 2,266

Total Assets $ 13,886 $ 2,236 $ 1,289,291 $ 35,537,306

Liabilities:Accounts payable $ - $ - $ - $ 2,935,701 Intergovernmental payable - - - 276,372 Accrued payroll and benefits payable - - - 92,422 Accrued liabilities - - - 51,372 Unearned revenue - - - 222,334 Line of credit - - - 2,106,123 Due to other funds - - - 94,856 Advances from other funds - - - 1,605,252 Other liabilities - - - 100,953

Total Liabilities - - - 7,485,385

Deferred Inflows of Resources:Unavailable revenues - - - 8,572,232

Fund Balances:Nonspendable - 1,000 909,230 1,212,559 Restricted 13,886 1,236 380,061 17,967,801 Committed - - - 4,349,883 Unassigned - - - (4,050,554)

Total Fund Balances 13,886 2,236 1,289,291 19,479,689

Total Liabilities. Deferred Inflows of Resources and Fund Balances $ 13,886 $ 2,236 $ 1,289,291 $ 35,537,306

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

Permanent Funds

131


132

Communityand Economic TIF TIF

Traffic Development Waterfront Downtown

Revenues:Taxes $ 317,470 $ 197,887 $ 2,537,801 $ 603,180 Licenses and permits - - - - Intergovernmental - 2,868,158 - - Charges for services 4,631,666 6,603 - - Contributions - 15,844 - - Investment income 452 276 - - Loan repayments - 57,357 - - Other 4,570 125,109 - -

Total Revenues 4,954,158 3,271,234 2,537,801 603,180


General government - - 51,000 - Public works 3,964,584 - - - Culture and recreation - - - - Community development - 3,900,796 - -

Capital outlay - - - - Debt service:

Principal 14,995 - 1,798,633 - Interest and bond issue costs 36,942 - 432,929 -

Total Expenditures 4,016,521 3,900,796 2,282,562 -

Excess (deficiency) of revenuesover (under) expenditures 937,637 (629,562) 255,239 603,180

Other Financing Sources (Uses):Issuance of bonds and loans - - 464,570 - Transfers in - 253,250 - - Transfers out (10,665) - (464,570) -

Total Other FinancingSources (Uses) (10,665) 253,250 - -

Net change in fund balances 926,972 (376,312) 255,239 603,180

Fund Balances, beginning of year 2,244,999 2,438,984 1,646,451 -

Fund Balances, end of year $ 3,171,971 $ 2,062,672 $ 1,901,690 $ 603,180


Combining Statement of Revenues, Expendituresand Changes in Fund Equity

Nonmajor Governmental Funds



133

Church CommunityStreet Impact Dedicated Development

Marketplace Fees Taxes Corporation Subtotals

$ - $ - $ 710,974 $ - $ 4,367,312 126,295 - - - 126,295 111,810 - - - 2,979,968 744,004 346,411 - 364,000 6,092,684

- - 26,087 - 41,931 138 - - - 866 - - - - 57,357 - - 65,953 95,903 291,535

982,247 346,411 803,014 459,903 13,957,948

- - - - 51,000 928,903 - - - 4,893,487

- 137,440 526,899 - 664,339 - - - 25,676 3,926,472 - - - - -

23,751 - - 313,158 2,150,537 588 202 - 184,157 654,818

953,242 137,642 526,899 522,991 12,340,653

29,005 208,769 276,115 (63,088) 1,617,295

- - - - 464,570 11,000 - 182,480 - 446,730

- - (206,978) - (682,213)

11,000 - (24,498) - 229,087

40,005 208,769 251,617 (63,088) 1,846,382

(43,594) 307,218 1,176,612 17,299 7,787,969

$ (3,589) $ 515,987 $ 1,428,229 $ (45,789) $ 9,634,351

(continued)


134

(continued)

CapitalChamplain Waterfront Improvement TrafficParkway Access Program Capital Wayfinding FEMA

Revenues:Taxes $ - $ - $ 2,114,418 $ - $ - $ - Licenses and permits - - - - - - Intergovernmental 1,679,126 21,875 1,035,040 - 201,448 48,474 Charges for services - - 342,258 - - - Contributions - - 372,944 - - - Investment income - - - 214 - - Loan repayments - - - - - - Other - - 6,156 - - -

Total Revenues 1,679,126 21,875 3,870,816 214 201,448 48,474


General government - - - - - - Public works 1,295,834 - - - - - Culture and recreation - - - - - - Community development - - - - - -

Capital outlay - 280,141 5,784,093 1,597,219 97,670 - Debt service:

Principal - - 162,794 - - - Interest and bond issue costs - - 14,117 - - -

Total Expenditures 1,295,834 280,141 5,961,004 1,597,219 97,670 -

Excess (deficiency) of revenuesover (under) expenditures 383,292 (258,266) (2,090,188) (1,597,005) 103,778 48,474

Other Financing Sources (Uses):Issuance of bonds and loans - - 9,997,000 - - - Transfers in 26,146 574,682 124,018 - 10,665 10,580 Transfers out - - (1,047,861) - - -

Total Other FinancingSources (Uses) 26,146 574,682 9,073,157 - 10,665 10,580

Net change in fund balances 409,438 316,416 6,982,969 (1,597,005) 114,443 59,054

Fund Balances, beginning of year (554,296) (244,396) 5,382,234 (1,489,632) (127,360) 7,934

Fund Balances, end of year $ (144,858) $ 72,020 $ 12,365,203 $ (3,086,637) $ (12,917) $ 66,988

Capital Project Funds

135

LolitaDowntown Great Loomis Deming

Parks Westlake Streets Other Subtotals Cemetery Library Estate

$ - $ - $ - $ - $ 2,114,418 $ - $ - $ - - - - - - - - - - - - - 2,985,963 - - - - - - - 342,258 - - -

350,000 - 29,014 - 751,958 - - - - - - 529 743 13,617 - - - - - - - - - - - - - - 6,156 3,846 - -

350,000 - 29,014 529 6,201,496 17,463 - -

- - - - - - - - - - - - 1,295,834 - - - - - - - - - - - - - - - - - - -

2,536,041 - 767,475 - 11,062,639 - - -

- - - - 162,794 - - - - - - - 14,117 - - -

2,536,041 - 767,475 - 12,535,384 - - -

(2,186,041) - (738,461) 529 (6,333,888) 17,463 - -

504,790 - - - 10,501,790 - - - 1,100,000 - 441,614 56,036 2,343,741 - - -

- - - - (1,047,861) (13,617) - -

1,604,790 - 441,614 56,036 11,797,670 (13,617) - -

(581,251) - (296,847) 56,565 5,463,782 3,846 - -

132,466 (11,132) - (3,553) 3,092,265 1,247,133 10,948 11,242

$ (448,785) $ (11,132) $ (296,847) $ 53,012 $ 8,556,047 $ 1,250,979 $ 10,948 $ 11,242

Capital Project Funds Permanent Funds

(continued)

136

(continued)

WEZF NonmajorMary E. 93 FM GovernmentalWaddell DARE Subtotals Funds

Revenues:Taxes $ - $ - $ - $ 6,481,730 Licenses and permits - - - 126,295 Intergovernmental - - - 5,965,931 Charges for services - - - 6,434,942 Contributions - - - 793,889 Investment income - - 13,617 15,226 Loan repayments - - - 57,357 Other - - 3,846 301,537

Total Revenues - - 17,463 20,176,907


General government - - - 51,000 Public works - - - 6,189,321 Culture and recreation - - - 664,339 Community development - - - 3,926,472

Capital outlay - - - 11,062,639 Debt service:

Principal - - - 2,313,331 Interest and bond issue costs - - - 668,935

Total Expenditures - - - 24,876,037

Excess (deficiency) of revenuesover (under) expenditures - - 17,463 (4,699,130)

Other Financing Sources (Uses):Issuance of bonds and loans - - - 10,966,360 Transfers in - - - 2,790,471 Transfers out - - (13,617) (1,743,691)

Total Other FinancingSources (Uses) - - (13,617) 12,013,140

Net change in fund balances - - 3,846 7,314,010

Fund Balances, beginning of year 13,886 2,236 1,285,445 12,165,679

$ 13,886 $ 2,236 $ 1,289,291 $ 19,479,689 Fund Balances, end of year

Permanent Funds

137

NON-MAJOR PROPRIETARY (ENTERPRISE) FUNDS Enterprise Funds were established to account for activities that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the activity be self-supporting based on user charges. Telecom: A fiber optic network that passes to almost 16,000 homes and businesses in the

City, as well as connecting the City’s municipal offices, schools, and essential services. Telecom provides internet, telephone, and video services to residential and business customers.

Wastewater: This Division of Public Works provides 3 wastewater treatment plants, 25 pump stations, and 100 miles of collection system for year-round wastewater disposal. For more details on this fund, refer to separately issued financial statements.

Water: Delivery of potable water to residents of Burlington and wholesale to the Colchester Fire District.

Stormwater: Stormwater addresses state and federal stormwater requirements to improve the water quality of Lake Champlain and the Winooski Rivers, as well as the streams that flow into them.

138

Telecom Wastewater Water Stormwater Total

Assets:Current:

Cash and cash equivalents $ 1,322,657 $ 3,001,101 $ 4,997,893 $ 717,923 $ 10,039,574 Restricted cash - - 367,500 - 367,500 Investments - - 995,942 - 995,942 Receivables, net of allowance for uncollectibles:

User fees 913,157 1,335,045 1,141,189 287,979 3,677,370 Intergovernmental - 251,579 57,211 251,579 560,369

Inventory 146,799 101,561 244,307 - 492,667 Prepaid expenses 110,000 82 503 - 110,585 Other current assets 6,200 - - - 6,200

Total current assets 2,498,813 4,689,368 7,804,545 1,257,481 16,250,207

Noncurrent:Restricted cash 1,356,987 1,440,242 - - 2,797,229 Capital assets:

Land and construction in progress 157,800 847,952 87,250 - 1,093,002 Intangible asset 5,100,000 - - - 5,100,000

5,572,990 23,693,013 11,370,054 1,568,824 42,204,881

Total noncurrent assets 12,187,777 25,981,207 11,457,304 1,568,824 51,195,112

TOTAL ASSETS 14,686,590 30,670,575 19,261,849 2,826,305 67,445,319

Deferred Outflows of Resources - pension related 548,964 697,497 944,562 - 2,191,023

$ 15,235,554 $ 31,368,072 $ 20,206,411 $ 2,826,305 $ 69,636,342

Liabilities:Current:

Accounts payable $ 436,046 $ 732,032 $ 372,496 $ 135,404 $ 1,675,978 Accrued payroll - 22,291 31,853 18,966 73,110 Unearned revenue 515,753 - 515,753 Note payable 251,579 - 251,579 503,158 Other current liabilities 1,275,646 - 42,399 - 1,318,045 Current portion of long-term liabilities:

Revenue bonds payable - 732,281 75,911 19,139 827,331 State revolving loans - 158,836 8,485 - 167,321 Capital leases payable 187,552 - - - 187,552

Total current liabilities 2,414,997 1,897,019 531,144 425,088 5,268,248

Noncurrent:Revenue bonds payablee, net of current portion - 11,716,496 3,625,741 337,601 15,679,838 State revolving loanse, net of current portion - 1,695,334 219,521 - 1,914,855 Net pension liability 1,006,801 1,256,143 1,712,439 - 3,975,383 Net OPEB obligation 137,962 60,919 81,040 2,617 282,538 Capital leases payable, net of current portion 5,517,795 - - - 5,517,795 Compensated absences payable 120,013 112,425 125,992 - 358,430

Total noncurrent liabilities 6,782,571 14,841,317 5,764,733 340,218 27,728,839

9,197,568 16,738,336 6,295,877 765,306 32,997,087

Deferred Inflows of Resources 265,630 45,181 61,593 - 372,404

Net investment in capital assets 5,125,443 10,238,017 10,875,812 1,212,084 27,451,356 For contingency reserve - 1,440,242 - - 1,440,242 For revenue fund 1,356,987 - - - 1,356,987 Unrestricted (710,074) 2,906,296 2,973,129 848,915 6,018,266

TOTAL NET POSITION 5,772,356 14,584,555 13,848,941 2,060,999 36,266,851

$ 15,235,554 $ 31,368,072 $ 20,206,411 $ 2,826,305 $ 69,636,342

See notes to financial statements.

Nonmajor Enterprise Funds


NONMAJOR PROPRIETARY FUNDS


JUNE 30, 2017

TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION

NET POSITION

TOTAL LIABILITIES

ASSETS AND DEFERRED OUTFLOWS OF RESOURCES

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES

Capital assets, net of accumulated depreciation

139

Telecom Wastewater Water Stormwater Total

Operating Revenues:Charges for services $ 8,999,941 $ 7,569,694 $ 6,017,451 $ 1,609,556 $ 24,196,642 Intergovernmental - - 19,789 21,357 41,146 Miscellaneous 87,541 - 298,030 - 385,571

Total Operating Revenues 9,087,482 7,569,694 6,335,270 1,630,913 24,623,359

Operating Expenses:Personnel 2,005,215 1,641,442 2,512,567 243,182 6,402,406 Nonpersonnel 3,530,393 3,059,654 2,198,919 617,080 9,406,046 Depreciation and amortization 867,084 1,594,846 679,503 61,561 3,202,994 Payments in lieu of taxes 76,993 945,450 424,973 10,000 1,457,416

Total Operating Expenses 6,479,685 7,241,392 5,815,962 931,823 20,468,862

Operating Income 2,607,797 328,302 519,308 699,090 4,154,497

Nonoperating Revenues (Expenses):Investment income 429 7,104 130 144 7,807 Stormwater design - (251,579) - (251,579) (503,158) Interest expense (407,376) (486,578) (86,068) (7,512) (987,534) Restructuring fees (166,920) - - - (166,920) Other income - 15,912 47,218 5,768 68,898

Total Nonoperating Revenues (Expenses) (573,867) (715,141) (38,720) (253,179) (1,580,907)

Income Before Contributions 2,033,930 (386,839) 480,588 445,911 2,573,590

Capital contributions - - - 60,000 60,000

Change in Net Position 2,033,930 (386,839) 480,588 505,911 2,633,590

Net Position at Beginning of Year 3,738,426 14,971,394 13,368,353 1,555,088 33,633,261

Net Position at End of Year $ 5,772,356 $ 14,584,555 $ 13,848,941 $ 2,060,999 $ 36,266,851

See notes to financial statements.

Nonmajor Enterprise Funds


NONMAJOR PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION


140

Telecom Wastewater Water StormwaterFund Fund Fund Fund Total

Cash Flows From Operating Activities:Receipts from customers and users $ 9,025,016 $ 7,686,730 $ 6,396,334 $ 1,543,694 $ 24,651,774 Receipts of operating grants - - 19,789 21,357 41,146 Payments to suppliers (2,774,429) (2,646,005) (1,934,337) (669,228) (8,023,999) Payments for wages and benefits (2,644,353) (1,389,857) (2,226,392) (231,559) (6,492,161) Payments in lieu of taxes (76,993) (945,450) (424,973) (10,000) (1,457,416) Other receipts - - 53,796 5,768 59,564

Net Cash Provided by Operating Activities 3,529,241 2,705,418 1,884,217 660,032 8,778,908

Cash Flows From Noncapital Financing Activities:Design costs financed by revolving loan - (251,579) - (251,579) (503,158) Restructuring fees (166,920) - - - (166,920)

Cash Provided/(Used) by Noncapital Financing Activities (166,920) (251,579) - (251,579) (670,078)

Cash Flows From Capital and Related Financing Activities:Acquisition and construction of capital assets (1,965,172) (408,301) (957,514) (324,213) (3,655,200) Proceeds from revenue bonds - - 3,250,000 - 3,250,000 Proceeds from premium - - 451,652 - 451,652 Capital grants/contributions - - - 60,000 60,000 Principal paid on:

Revenue bonds - (732,281) - (18,764) (751,045) State revolving loans - (155,721) - - (155,721) Capital lease obligations (257,287) - (7,367) - (264,654)

Interest paid on outstanding debt, including issue costs (407,376) (486,578) (86,068) (7,511) (987,533)

Net Cash Provided/(Used) by Capital and Related Financing Activities (2,629,835) (1,782,881) 2,650,703 (290,488) (2,052,501)

Cash Flows From Investing Activities:Increase in restricted cash and investments (693,774) (5,397) (1,363,442) - (2,062,613) Receipt of interest & dividends 429 7,104 132 144 7,809

Net Cash Provided/(Used) by Investing Activities (693,345) 1,707 (1,363,310) 144 (2,054,804)

Net Increase/(Decrease) in Cash 39,141 672,665 3,171,610 118,109 4,001,525 Cash and cash equivalents at beginning of year 1,283,516 2,328,436 1,826,283 599,814 6,038,049 Cash and cash equivalents at end of year $ 1,322,657 $ 3,001,101 $ 4,997,893 $ 717,923 $ 10,039,574

Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities:

Operating Income $ 2,607,797 $ 328,302 $ 519,308 $ 699,090 $ 4,154,497 Depreciation and amortization 867,084 1,594,846 679,503 61,561 3,202,994 Other reconciling item - - 53,796 5,768 59,564 Changes in assets, liabilities, and deferred outflows/inflows

(Increase)/Decrease in receivables (107,490) 117,036 65,537 (65,862) 9,221 (Increase)/Decrease in inventory 287,375 18,309 24,583 - 330,267 (Increase)/Decrease in deferred outflows - related to pensions (34,540) (230,653) (306,760) - (571,953) Increase/(Decrease) in accounts payable 109,576 393,960 239,311 (52,148) 690,699 Increase/(Decrease) in customer deposits (1,201) - 15,316 - 14,115 Increase/(Decrease) in accrued payroll and benefits - 3,260 7,668 11,623 22,551 Increase/(Decrease) in accrued liabilities 391,549 - - - 391,549 Increase/(Decrease) in deferred charges 46,225 - - - 46,225

(117,228) 399,791 542,703 - 825,266

15,600 - - - 15,600 Increase/(Decrease) in compensated absences 22,132 34,006 (19,029) - 37,109 Other operating assets/liabilities (32,536) 1,380 688 - (30,468) Increase/(Decrease) in deferred inflows - related to pensions 265,630 45,181 61,593 - 372,404

Capitalized labor (790,732) - - - (790,732)

Net Cash Provided by Operating Activities $ 3,529,241 $ 2,705,418 $ 1,884,217 $ 660,032 $ 8,778,908

See Notes to Financial Statements

STATEMENT OF CASH FLOWS

CITY OF BURLINGTON, VERMONTNONMAJOR PROPRIETARY FUNDS


Increase/(Decrease) in net pension liability Increase/(Decrease) in other post employment benefits liability

141

PRIVATE PURPOSE FUNDS Private purpose trust funds are used to account for assets held by the City of Burlington, Vermont in a trustee capacity. Louisa Howard: Bequest by L. Howard in 1894 with interest to be used for benefit of fire-

men injured in the line of duty.

Walter Carpenter: Bequest by W. Carpenter in 1929 with interest to be used annually for a Christmas dinner for the destitute in Burlington.

Fireman’s Relief: Appropriated by the City with interest earned for benefit of firemen injured in line of duty.

Christmas Gift: Donations during WWII for gifts to servicemen oversees.

142

Louisa Walter Fireman's ChristmasHoward Carpenter Relief Gift Total

Cash and short-term investments $ 28,088 $ 7,521 $ 628 $ 1,620 $ 37,857

Total Assets 28,088 7,521 628 1,620 37,857

Net position held in trust $ 28,088 $ 7,521 $ 628 $ 1,620 $ 37,857

NET POSITION


Combining Statement of Fiduciary Net Position

Private Purpose Trust Funds

June 30, 2017

ASSETS

143

Louisa Walter Fireman's ChristmasHoward Carpenter Relief Gift Total

Investment income $ - $ 9 $ - $ - $ 9

Total Additions - 9 - - 9

Net increase - 9 - - 9

Beginning of year 28,088 7,512 628 1,620 37,848

End of year $ 28,088 $ 7,521 $ 628 $ 1,620 $ 37,857

NET POSITION


Combining Statement of Changes in Fiduciary Net Position

Private Purpose Trust Funds


ADDITIONS

144

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145

STATISTICAL SECTION

146


147


STATISTICAL SECTION The City of Burlington’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclo-sures, and required supplementary information says about the City’s overall financial health. Page Financial Trends

These schedules contain trend information to help the reader understand how the Town’s financial performance and well-being have changed over time.

148 - 152

Revenue Capacity These schedules contain information to help the reader assess the Town’s most significant local revenue source, the property tax.

153 – 156

Debt Capacity These schedules present information to help the reader assess the affordability of the Town’s current levels of outstanding debt and the Town’s ability to issue additional debt in the future.

157 - 161

Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town’s financial activities take place.

162 - 163

Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Town’s financial report relates to the service the government provides and the activities it performs.

164 - 166

2017 2016 2015 (1) 2014 2013 2012 2011 2010 2009 2008

Governmental ActivitiesNet Investment in Capital Assets 98,441,690$ 92,236,468$ 82,986,888$ 104,389,306$ 101,991,786$ 111,373,478$ 140,431,453$ 141,325,963$ 135,869,663$ 131,531,661$ Restricted 13,086,695 17,725,332 16,799,937 15,285,119 13,949,243 10,773,209 9,275,500 7,931,128 9,784,253 6,318,445 Unrestricted (22,193,434) (21,734,316) (25,449,498) (5,306,520) 7,927,203 2,958,684 (4,062,816) (6,476,248) (10,766,232) (8,025,245)

Total GovernmentalActivities Net Position 89,334,951 88,227,484 74,337,327 114,367,905 123,868,232 125,105,371 145,644,137 142,780,843 134,887,684 129,824,861

Business-type ActivitiesNet Investment in Capital Assets 188,464,010 179,096,254 172,629,734 156,804,042 149,806,307 139,041,152 134,805,081 98,953,992 77,968,937 72,812,022 Restricted 22,670,943 20,812,890 19,319,510 32,017,674 31,999,045 39,020,023 32,944,710 34,179,074 31,366,671 29,204,097 Unrestricted 29,639,505 27,982,661 22,266,988 28,692,499 12,449,872 3,526,400 4,799,188 1,160,504 12,444,615 21,079,712

Total Business-typeActivities Net Position 240,774,458 227,891,805 214,216,232 217,514,215 194,255,224 181,587,575 172,548,979 134,293,570 121,780,223 123,095,831

Primary GovernmentNet Investment in Capital Assets 286,905,700 271,332,722 255,616,622 261,193,348 251,798,093 250,414,630 275,236,534 240,279,955 213,838,600 204,343,683 Restricted 35,757,638 38,538,222 36,119,447 47,302,793 45,948,288 49,793,232 42,220,210 42,110,202 41,150,924 35,522,542 Unrestricted 7,446,071 6,248,345 (3,182,510) 23,385,979 20,377,075 6,485,084 736,372 (5,315,744) 1,678,383 13,054,467

Total Primary GovernmentNet Position 330,109,409$ 316,119,289$ 288,553,559$ 331,882,120$ 318,123,456$ 306,692,946$ 318,193,116$ 277,074,413$ 256,667,907$ 252,920,692$

Source: Each respective Annual Financial Report

(1) Net position restated due to School District adjustments.

CITY OF BURLINGTON, VERMONTNET POSITION BY COMPONENT

LAST TEN YEARS(accrual basis of accounting)

148

CITY OF BURLINGTON, VERMONT CHANGES IN NET POSITION


2017 2016 2015 (1) 2014 2013 2012 2011 2010 2009 2008

ExpensesGovernmental Activities:

General Government 12,334,976$ 11,353,565$ 12,393,196$ 12,702,289$ 14,800,538$ 13,479,552$ 13,426,363$ 8,396,986$ 7,833,861$ 7,731,527$ Public Safety 29,094,586 23,500,758 24,915,179 22,692,852 24,499,396 22,702,099 21,931,701 20,783,010 20,708,638 20,262,074 Education - - 77,470,770 77,438,762 70,038,411 66,901,788 62,376,087 57,639,807 53,322,002 Public Works 16,128,749 15,484,410 17,038,012 14,172,277 13,051,255 13,409,033 13,101,541 12,042,610 12,111,622 11,375,602 Culture and Recreation 14,185,639 10,066,735 10,736,031 9,965,826 8,584,443 9,453,885 9,244,881 11,026,270 10,069,342 9,247,568 Community Development 4,942,418 4,895,091 4,931,161 4,068,608 8,470,457 4,743,445 5,082,322 4,734,066 4,149,542 4,104,701 Interest on Long-term Debt 2,147,709 1,782,295 1,581,846 3,087,143 2,330,680 1,541,535 2,791,517 1,752,555 1,520,465 1,796,364

Total Governmental Activities 78,834,077 67,082,854 71,595,425 144,159,765 149,175,531 135,367,960 132,480,113 121,111,584 114,033,277 107,839,838

Business-type Activities:Electric 63,449,764 63,912,747 62,408,788 65,061,544 58,972,894 58,154,956 56,676,147 55,160,426 54,915,355 50,408,203 Airport 20,368,534 19,753,724 20,288,983 20,772,761 20,192,615 19,983,379 16,690,935 15,623,985 16,562,164 15,071,525 Telecom - - 6,791,829 6,118,395 6,109,867 7,107,667 10,579,222 10,480,260 7,848,863 Wastewater - - 7,289,587 6,648,603 6,863,244 6,522,461 5,655,138 5,447,686 5,100,231 Nonmajor 22,126,474 20,803,532 19,931,149 8,302,064 8,048,347 7,725,191 7,485,535 6,778,199 6,791,139 6,595,387

Total Business-Type Activities 105,944,772 104,470,003 102,628,920 108,217,785 99,980,854 98,836,637 94,482,745 93,796,970 94,196,604 85,024,209

Total Expenses 184,778,849 171,552,857 174,224,345 252,377,550 249,156,385 234,204,597 226,962,858 214,908,554 208,229,881 192,864,047

Program RevenuesGovernmental Activities:

Charges for Services:General Government 5,204,079 5,043,853 5,289,088 4,938,750 4,372,982 4,566,523 4,629,070 1,198,950 965,261 1,105,956 Public Safety 5,737,200 6,997,158 5,587,200 6,526,060 5,174,000 6,298,499 5,823,531 5,271,957 6,309,231 5,227,594 Education - - 1,036,876 4,575,124 3,112,442 3,110,746 5,946,825 1,210,392 1,314,480 Public Works 8,448,998 8,898,625 7,475,742 7,766,867 7,265,536 7,019,336 6,744,645 1,194,606 4,993,790 4,294,457 Culture and Recreation 4,068,846 4,277,482 4,074,232 3,849,129 3,722,853 3,328,668 2,983,704 3,792,403 3,128,842 3,435,507 Community Development 315,042 221,533 714,715 250,361 214,897 131,415 158,512 1,423,809 403,704 1,388,507 Capital Outlay - 302,592 429,582

Operating Grants and Contributions 4,110,352 4,515,575 5,922,165 84,297,547 76,620,402 77,050,104 72,053,237 67,279,458 59,707,134 53,039,312 Capital Grants and Contributions 3,232,947 4,688,216 3,112,726 2,339,931 5,193,962 3,476,470 1,524,271 3,050,389 4,978,575 2,161,602

Total Governmental Activities 31,117,464 34,642,442 32,175,868 111,005,521 107,139,756 104,983,457 97,027,716 89,158,397 81,999,521 72,396,997

Business-type Activities: Charges for Services

Electric 60,223,551 62,505,682 62,622,315 63,381,532 59,965,267 58,837,344 59,679,347 54,033,005 50,010,832 49,624,179 Airport 18,589,325 18,470,124 19,030,728 18,794,078 17,915,076 17,478,275 16,416,564 11,724,249 12,023,774 11,384,027 Telecom - - 7,246,329 6,959,342 6,701,375 7,199,476 7,052,969 6,284,633 2,984,347 Wastewater - - 7,726,659 7,751,070 7,588,128 7,176,316 6,680,437 6,024,216 5,201,648 Nonmajor 24,582,213 24,151,054 21,464,113 8,943,170 8,756,986 8,304,743 8,106,743 7,667,023 6,987,959 7,128,916

Operating Grants and Contributions 218,384 205,387 - - - - - 429,477 386,202 145,587 Capital Grants and Contributions 11,025,482 9,118,954 7,431,502 7,722,603 7,976,875 8,454,165 26,872,882 19,074,399 11,741,445 6,374,448

Total Business-type Activities 114,638,955 114,451,201 110,548,658 113,814,371 109,324,616 107,364,030 125,451,328 106,661,559 93,459,061 82,843,152

Total Program Revenues 145,756,419 149,093,643 142,724,526 224,819,892 216,464,372 212,347,487 222,479,044 195,819,956 175,458,582 155,240,149

Net (Expense)/RevenueGovernmental Activities (47,716,613) (32,440,412) (39,419,557) (33,154,244) (42,035,775) (30,384,503) (35,452,397) (31,953,187) (32,033,756) (35,442,841) Business-type Activities 8,694,183 9,981,198 7,919,738 5,596,586 9,343,762 8,527,393 30,968,583 12,864,589 (737,543) (2,181,057)

Total Net Expense (39,022,430)$ (22,459,214)$ (31,499,819)$ (27,557,658)$ (32,692,013)$ (21,857,110)$ (4,483,814)$ (19,088,598)$ (32,771,299)$ (37,623,898)$

149

CITY OF BURLINGTON, VERMONTCHANGES IN NET POSITION (continued)


(continued)

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

General RevenuesGovernmental Activities:

Property Taxes 33,253,448$ 31,409,270$ 33,054,429$ 29,494,623$ 28,272,251$ 27,884,131$ 28,488,306$ 27,523,255$ 25,649,929$ 24,870,758$ Gross Receipts Taxes 4,034,408 3,906,652 3,665,158 3,190,082 2,902,808 2,761,865 2,507,382 2,362,060 2,184,515 2,199,949 Local Option Sales Tax 2,329,007 2,239,937 2,179,587 2,125,034 2,126,646 2,157,170 1,998,462 1,937,967 1,885,141 2,158,372 Payments in Lieu of Taxes 5,248,985 5,079,036 2,395,762 2,257,824 3,534,236 3,392,592 2,116,319 1,093,798 970,324 1,681,879 Franchise Fees 2,161,617 2,376,990 2,128,227 2,193,447 2,157,022 2,176,076 2,047,748 2,874,784 2,727,631 1,938,684 Impact Fees 346,411 138,723 349,714 82,262 272,852 385,702 118,207 268,019 91,956 198,144 Interest and Penalties on Deliquent Ta 303,370 339,034 356,550 368,602 278,419 331,971 319,667 318,881 288,033 311,708 Unrestricted Investment Earnings 249,012 193,991 100,725 634,071 52,148 27,695 714,974 435,179 651,377 635,693 Other Revenues 1,698,196 642,968 1,175,521 1,048,832 296,973 - - 76,337 1,220 -

Additions to permanent Funds 3,846 3,968 67,115 25,715 20,005 34,565 - 25,145 36,874 56,641 Special item (2,154,349) - - (16,936,492) - (29,251,302) - - - - Transfers - - 28,921 (97,572) (97,500) (54,728) 4,626 2,930,921 2,609,579 2,630,420 Total Governmental Activities 47,473,951 46,330,569 45,501,709 24,386,428 39,815,860 9,845,737 38,315,691 39,846,346 37,096,579 36,682,248

Business-type Activities:Unrestricted Investment Earnings 158,415 184,630 127,214 291,397 269,758 271,471 391,421 607,153 571,356 1,698,032 Dividends from associated companies 3,516,718 3,236,147 3,128,753 2,907,831 2,619,286 - - - - Other Revenues 513,337 273,598 429,794 (368,970) 370,226 185,004 177,868 1,972,526 1,460,158 212,795

Special item - - - 16,936,492 - - 6,722,163 - - - Transfers - - (28,921) 97,572 97,500 54,728 (4,626) (2,930,921) (2,609,579) (2,618,968) Total Business-type Activities 4,188,470 3,694,375 3,656,840 19,864,322 3,356,770 511,203 7,286,826 (351,242) (578,065) (708,141)

Total Primary Government 51,662,421 50,024,944 49,158,549 44,250,750 43,172,630 10,356,940 45,602,517 39,495,104 36,518,514 35,974,107

Change in Net PositionGovernmental Activities (242,662) 13,890,157 6,082,152 (8,767,816) (2,219,915) (20,538,766) 2,863,294 7,893,159 5,062,823 1,239,407 Business-type Activities 12,882,653 13,675,573 11,576,578 25,460,908 12,700,532 9,038,596 38,255,409 12,513,347 (1,315,608) (2,889,198)

Total Change in Net Position 12,639,991$ 27,565,730$ 17,658,730$ 16,693,092$ 10,480,617$ (11,500,170)$ 41,118,703$ 20,406,506$ 3,747,215$ (1,649,791)$


(1) School District was reclassified to Discretly Presented Component Unit due to change in legal entity structure.

150

CITY OF BURLINGTON, VERMONTFUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN YEARS(modified accrual basis of accounting)

2017 2016 2015(2) 2014 2013 2012 2011(1) 2010 2009 2008

All Governmental FundsNonspendable 3,037,839$ 3,856,421$ 3,486,412$ 3,958,011$ 21,441,396$ 24,261,046$ 26,651,255$ -$ -$ -$ Restricted 18,528,173 10,330,002 9,525,627 6,424,997 7,604,997 7,740,185 5,130,240 - - - Committed 5,559,637 5,915,503 4,133,553 6,831,663 3,558,828 8,769,100 2,870,793 - - - Assigned 3,619,252 - - - 208,962 262,810 438,727 - - - Unassigned 4,358,533 4,046,532 2,385,971 (2,997,049) (9,011,184) (20,338,070) (24,743,477) - - - Reserved - - - - - - - 4,820,275 6,278,556 3,586,543 Unreserved - - - - - - - 1,155,138 (1,468,566) 1,008,781

Total All Other Governmental Funds 35,103,434$ 24,148,458$ 19,531,563$ 14,217,622$ 23,802,999$ 20,695,071$ 10,347,538$ 5,975,413$ 4,809,990$ 4,595,324$

General FundNonspendable 1,825,280$ 2,661,874$ 2,321,904$ 2,845,487$ 20,334,968$ 23,132,150$ 25,529,737$ -$ -$ -$ Restricted 560,372 38,500 17,265 17,265 17,261 3,867,936 1,794,807 - - - Committed 1,209,754 2,779,209 1,624,950 2,058,049 1,041,535 3,345,215 2,332,434 - - - Assigned 3,619,252 - - - 208,962 262,810 438,727 - - - Unassigned 8,409,087 6,520,495 4,287,378 71,822 (2,178,623) (14,982,331) (16,790,895) - - - Reserved - - - - - - - 2,677,175 4,013,988 1,584,181 Unreserved - - - - - - - 7,238,591 4,839,768 5,550,016

Total General Fund 15,623,745$ 12,000,078$ 8,251,497$ 4,992,623$ 19,424,103$ 15,625,780$ 13,304,810$ 9,915,766$ 8,853,756$ 7,134,197$

All Other Governmental FundsNonspendable 1,212,559$ 1,194,547$ 1,164,508$ 1,112,524$ 1,106,428$ 1,128,896$ 1,121,518$ -$ -$ -$ Restricted 17,967,801 10,291,502 9,508,362 6,407,732 7,587,736 3,872,249 3,335,433 - - - Committed 4,349,883 3,136,294 2,508,603 4,773,614 2,517,293 5,423,885 538,359 - - - Assigned - - - - - - - - - - Unassigned (4,050,554) (2,473,963) (1,901,407) (3,068,871) (6,832,561) (5,355,739) (7,952,582) - - - Reserved - - - - - - - 2,143,100 2,264,568 2,002,362 Unreserved - - - - - - - (6,083,453) (6,308,334) (4,541,235)

Total All Other Governmental Funds 19,479,689$ 12,148,380$ 11,280,066$ 9,224,999$ 4,378,896$ 5,069,291$ (2,957,272)$ (3,940,353)$ (4,043,766)$ (2,538,873)$


(1) Components of fund balance were reclassified with the implementation of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions .(2) School District was reclassified to Discretly Presented Component Unit due to change in legal entity structure.

151

CITY OF BURLINGTON, VERMONTCHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN YEARS(modified accrual basis of accounting)

2017 2016 2015(1) 2014 2013 2012 2011 2010 2009 2008

RevenuesTaxes 39,781,518$ 39,097,706$ 38,770,459$ 35,721,358$ 33,509,448$ 33,409,559$ 32,937,202$ 31,969,583$ 29,760,367$ 29,482,074$ Payments in lieu of taxes 5,248,985 5,079,036 2,395,762 2,257,824 3,534,236 3,391,718 3,438,180 4,073,883 3,665,263 4,514,706 Licenses and permits 5,570,707 5,082,269 3,866,933 4,396,587 4,070,213 5,270,706 5,439,891 6,480,017 5,323,127 5,231,991 Intergovernmental 6,857,683 8,569,938 8,717,811 86,426,117 78,334,827 73,660,719 68,884,213 67,722,285 60,727,565 55,480,481 Charges for services 21,090,765 21,499,084 21,781,930 21,636,460 23,437,932 18,154,362 17,281,634 15,951,249 15,164,771 13,699,078 Contributions 1,373,500 538,878 - - - - - - - - Investment income 249,013 193,993 100,725 634,070 52,148 675,834 955,816 418,298 638,530 630,227 Fines and forfeits - - - - 1,572,016 1,609,974 1,736,306 1,812,353 1,693,492 Loan repayments 57,357 104,033 122,544 245,074 46,741 4,873,509 74,160 233,006 280,222 1,236,092 Other revenue 585,799 601,849 1,230,412 1,160,440 415,290 5,536,858 4,654,385 3,568,399 2,650,227 2,128,834

Total Revenues 80,815,327 80,766,786 76,986,576 152,477,930 143,400,835 146,545,281 135,275,455 132,153,026 120,022,425 114,096,975

ExpendituresCurrent:

General government 12,202,374 11,400,333 11,158,205 13,643,302 13,704,648 13,339,250 12,958,447 10,064,841 9,487,847 8,783,755 Public safety 26,493,268 25,561,099 24,668,195 22,734,841 23,507,829 21,768,729 21,075,037 21,067,550 20,740,944 20,432,704 Education - - - 76,037,906 81,284,025 70,399,945 66,139,968 60,669,307 56,147,563 51,980,275 Public works 11,991,808 9,788,601 9,455,450 8,378,414 6,533,226 8,994,691 8,302,028 8,700,816 8,575,237 8,168,098 Culture and Recreation 11,241,909 12,100,903 11,624,098 10,355,792 7,348,962 8,263,436 8,148,833 9,947,876 9,031,010 8,287,390 Community development 4,636,189 4,125,042 4,081,123 3,915,514 8,463,496 4,739,169 5,078,399 5,265,051 5,822,484 4,193,431

Capital Outlay (2) 11,062,639 13,179,734 9,483,616 7,239,386 9,121,280 8,770,755 19,799,363 14,159,910 10,199,057 6,816,084 Debt Service:

Principal 4,545,560 4,117,610 3,373,102 4,950,428 4,729,974 3,976,551 3,766,324 4,285,797 4,374,613 6,502,172 Interest and bond issue costs 2,094,364 1,805,722 1,568,269 2,763,625 1,873,163 2,072,080 3,016,548 1,812,548 1,505,013 1,869,200

Total Expenditures 84,268,111 82,079,044 75,412,058 150,019,208 156,566,603 142,324,606 148,284,947 135,973,696 125,883,768 117,033,109

Excess (Deficiency) of Revenuesover Expenditures (3,452,784) (1,312,258) 1,574,518 2,458,722 (13,165,768) 4,220,675 (13,009,492) (3,820,670) (5,861,343) (2,936,134)

Other Financing Sources (Uses)Issuance of bonds and loans 10,966,360 5,062,083 5,934,807 3,989,967 14,250,000 3,560,000 12,361,991 5,014,085 6,142,128 1,793,374 Issuance of refunding debt 2,545,000 8,785,000 - - - - - - - - Issuance of leases 1,699,383 987,234 683,718 - 261,242 1,621,586 - - - - Payment to refunding escrow (2,837,850) (10,044,139) - - - - - - - - Sale of capital assets 949,986 - - 1,000,000 - - - - - - Bond premium 1,067,582 1,138,975 - - 419,080 - - 22,008 19,881 5,182 Issuance of notes - - - - - 1,000,000 5,015,000 - - - Transfers in 2,804,088 4,532,340 4,363,550 4,190,396 1,854,249 2,630,787 2,179,272 1,292,498 1,943,194 1,388,122 Transfers out (2,804,088) (4,532,340) (4,334,629) (4,287,968) (1,951,749) (2,685,515) (2,174,646) (1,342,498) (2,029,194) (1,591,170)

Total Other Financing Sources (Uses) 14,390,461 5,929,153 6,647,446 4,892,395 14,832,822 6,126,858 17,381,617 4,986,093 6,076,009 1,595,508

Special Item - - - (16,936,492) - - - - - -

Net Change in Fund Balances 10,937,677$ 4,616,895$ 8,221,964$ (9,585,375)$ 1,667,054$ 10,347,533$ 4,372,125$ 1,165,423$ 214,666$ (1,340,626)$

Debt Service as a Percentage

of Noncapital Expenditures (3) 9.07% 8.60% 7.50% 5.40% 4.48% 4.53% 5.28% 5.01% 5.08% 7.60%


(1) School District was reclassified to Discretly Presented Component Unit due to change in legal entity structure. (2) Certain capital expenditures from various functions have been capitalized on the Statement of Net Position. (3) Capital outlay purchases from the reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the Governmental Funds to the Statement of Activities are

used to calculate this ratio.

152

Fiscal Year Assessed ValueEstimated Actual

ValueTotal Direct

Tax Rate

2017 3,781,825,939$ 4,474,474,608$ 0.7826$ 2016 3,736,048,309 4,267,608,304 0.79262015 3,646,921,910 4,137,177,436 0.79582014 3,617,870,130 4,019,395,477 0.75842013 3,587,077,000 4,056,808,890 0.71532012 3,563,141,000 3,957,600,400 0.72802011 3,530,253,980 3,907,269,536 0.72002010 3,505,811,750 3,933,636,760 0.71202009 3,472,718,196 3,925,485,365 0.67002008 3,401,015,819 3,667,787,134 0.6700

Source: Most recent official statement

CITY OF BURLINGTON, VERMONTASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS

153

Fiscal YearCity of

Burlington Residential Nonresidential Residential Nonresidential

2017 0.7826$ 1.7237$ 1.8161$ 2.5063$ 2.5987$ 2016 0.7926 1.6544 1.7535 2.4470 2.5461 2015 0.7958 1.6358 1.7187 2.4316 2.51452014 0.7584 1.5257 1.6055 2.2841 2.36392013 0.7153 1.4302 1.5684 2.1455 2.28372012 0.7280 1.3019 1.5441 2.0299 2.27212011 0.7200 1.2820 1.5390 2.0020 2.25902010 0.7120 1.2394 1.5334 1.9514 2.24542009 0.6700 1.1090 1.4560 1.7790 2.12602008 0.6700 1.0217 1.3786 1.6917 2.0486

Notes:

Tax rates are per $100 of assessed value.

Source: Most recent Official Statement

State-wide Education Taxes Total TaxesAfter Act 68

CITY OF BURLINGTON, VERMONTPROPERTY TAX RATES

DIRECT AND OVERLAPPING GOVERNMENTSLAST TEN FISCAL YEARS

154

TaxpayerTaxable

Assessed Value Rank

Percentage of Total Assessed

ValueTaxable

Assessed Value Rank

Percentage of Total Assessed

value

Forfeith Burlington 29,120,000$ 1 0.78% 30,000,000$ 1 0.79%Diamondrock Burlington Owner LLC 25,933,400 2 0.69% 31,120,080 0.82%UVM/Redstone Lofts LLC 24,820,000 3 0.66% 24,820,000 0.66%Burlington Town Center LLC 20,837,900 4 0.56% 25,005,480 3 0.66%Burlington Harbor Hotel Group LLC 16,833,400 5 0.45% 20,200,080 0.53%Burlington Electric Dept/CVPS 14,902,723 6 0.40% 17,883,268 4 0.47%Antonio B Pormeleau LLC 14,649,300 7 0.39% 17,579,160 5 0.46%Vermont Electric Power 12,033,450 8 0.32% 12,033,450 0.32%May Department Stores Co 11,123,400 9 0.30% 13,348,080 6 0.35%New Northagate Housing LLC 11,089,000 10 0.30% 11,089,000 7 0.29%Howard Opera 9,001,300 0.24% 10,801,560 8 0.29%Lake and College LLC 7,754,500 0.21% 9,305,400 10 0.25%

198,098,373$ 5.30% 223,185,558$ 6.56%


2017 2008

CITY OF BURLINGTON, VERMONTPRINCIPAL PROPERTY TAXPAYERS

CURRENT YEAR AND NINE YEARS AGO

155

CITY OF BURLINGTON, VERMONTPROPERTY TAX LEVIES AND COLLECTIONS


Fiscal Year Ended June 30

Total Tax Levy for Fiscal Year

Amount Collected

Percentage of Levy

Collections in Subsequent

YearsAmount

CollectedPercentage of

Levy

2017 96,064,036$ 95,568,777$ 99.48% -$ 95,568,777 99.48%2016 93,015,324 92,467,139 99.41% 470,535 92,937,674 99.92%2015 89,907,261 89,275,258 99.30% 496,937 89,772,195 99.85%2014 83,526,157 82,869,824 99.21% 531,197 83,401,021 99.85%2013 78,862,874 78,330,310 99.32% 15,461 78,345,771 99.34%2012 76,089,194 75,617,383 99.38% 354,801 75,972,184 99.85%2011 74,818,352 74,276,290 99.28% 484,205 74,760,495 99.92%2010 73,213,724 72,730,820 99.34% 491,548 73,222,368 100.01%2009 67,656,483 67,163,625 99.27% 579,945 67,743,570 100.13%2008 64,198,793 63,485,136 98.89% 1,189,522 64,674,658 100.74%

Source: Most recent Official Statement for fiscal years 2008 - 2016 and Form 411 Billed Grand List and activity in the City's general ledger for fiscal year 2017.

Collected within the Fiscal Year of the Levy Total Collections to Date

156

CITY OF BURLINGTON, VERMONTRATIOS OF OUSTANDING DEBT BY TYPE


Fiscal Year

Bonds and Loans

Revenue Bonds Notes Capital Leases Bonds

Revenue Bonds and SRLs Notes Capital Leases

Total Debt Outstanding

Estimated Population (1)

Debt per Capita

Percentage of Personal Income (2)

2017 52,906,348$ -$ -$ 2,301,048$ 47,605,714$ 80,077,692$ -$ 7,319,392$ 190,210,194$ 44,020 4,321$ 17.12%2016 45,636,800 - - 1,206,228 48,880,636 83,191,618 228,006 6,553,118 185,696,406 42,452 4,374 17.33%2015 46,423,144 - - 1,086,318 46,770,713 84,889,798 228,006 6,834,297 186,232,276 42,452 4,387 17.35%2014 63,903,739 - - 1,370,191 45,810,000 85,630,972 - 1,152,142 197,867,044 42,613 4,643 18.38%2013 63,358,572 - - 1,946,424 44,685,000 94,863,085 - 1,714,567 206,567,648 42,738 4,833 19.23%2012 51,756,866 - 1,000,000 2,749,589 42,725,908 93,863,525 2,000,000 2,320,054 196,415,942 42,637 4,607 18.37%2011 46,000,199 - 5,015,000 2,294,817 42,413,105 93,648,092 900,000 2,866,790 193,138,003 42,450 4,550 18.07%2010 36,447,374 - - 3,251,485 43,948,084 108,637,954 - 1,908,996 194,193,893 42,442 4,576 18.18%2009 32,680,809 - 4,000,000 2,289,762 49,820,834 96,125,000 1,000,000 33,878,667 219,795,072 42,417 5,182 20.57%2008 35,315,956 - - 1,887,100 29,907,220 105,440,000 13,340 33,774,149 206,337,765 42,417 4,865 19.31%


(1) United States Census Bureau(2) Personal Income is disclosed in Demographic and Economic Indicators Table

Governmental Activities* Business-type Activities*

157

CITY OF BURLINGTON, VERMONTRATIOS OF GENERAL BONDED DEBT OUTSTANDING


Fiscal Year Total Debt

Less: Debt Payable from

Enterprise Fund Revenues

Net General Obligation Debt Population (1) Debt per Capita Assessed Value

Ratio of Debt to Assessed Value

2017 190,210,194$ 135,002,798$ 55,207,396$ 44,020$ 1,254$ 3,656,872,900$ 1.51%2016 185,696,406 138,853,378 46,843,028 42,452 1,103 3,736,048,309 1.25%2015 186,232,276 138,722,814 47,509,462 42,452 1,119 3,646,921,910 1.30%2014 197,867,044 132,593,114 65,273,930 42,613 1,532 3,617,870,130 1.80%2013 206,567,648 141,262,652 65,304,996 42,738 1,528 3,587,077,000 1.82%2012 196,415,942 140,909,487 55,506,455 42,637 1,302 3,563,141,000 1.56%2011 193,138,003 139,827,987 53,310,016 42,450 1,256 3,530,253,980 1.51%2010 194,193,893 154,495,034 39,698,859 42,442 935 3,505,811,750 1.13%2009 219,795,072 180,824,501 38,970,571 42,417 919 3,472,718,196 1.12%2008 206,337,765 169,134,709 37,203,056 42,417 877 3,401,015,819 1.09%

Sources: Each respective Annual Financial Report and

(1) United States Census Bureau

158


DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBTJUNE 30, 2017

Jurisdiction

Net General Obligation Debt

Outstanding

Percentage Applicable to

the City

Amount Applicable to

the City of Burlington

Direct:City of Burlington - Bonds 52,906,348$ 100.0% 52,906,348$ City of Burlington - Capital Leases 2,301,048 100.0% 2,301,048

Subtotal - Direct Debt 55,207,396

Overlapping:Burlington School District -

Subtotal - Overlapping Debt -

Grand Total Direct and Overlapping Debt 55,207,396$

Source: June 30, 2017 Annual Financial Reports

159

Grand List Valuation 3,787,167,109$

Legal Debt Margin

Debt Limitation - Ten Times Last Grant List 378,716,711

Debt Applicable to Limitation 64,496,286

Legal Debt Margin 314,220,425$

Debt as Percentage of Debt Limit 17.03%

LEGAL DEBT MARGINPRECEDING NINE YEARS

Fiscal Year Debt LimitApplicable

Debt*Legal Debt

MarginDebt as Percentage

of Debt Limit

2017 378,716,711$ 64,496,286$ 314,220,425$ 17.03%2016 377,855,052 55,092,103 322,762,949 14.58%2015 373,604,831 55,092,130 318,512,701 14.75%2014 364,692,191 53,150,000 311,542,191 14.57%2013 361,787,013 51,505,000 310,282,013 14.24%2012 358,707,700 37,605,000 321,102,700 10.48%2011 356,314,100 30,753,333 325,560,767 8.63%2010 353,025,398 20,757,499 332,267,899 5.88%2009 350,581,175 15,897,809 334,683,366 4.53%2008 347,271,820 18,067,175 329,204,645 5.20%


CITY OF BURLINGTON, VERMONTLEGAL DEBT MARGIN INFORMATION

JUNE 30, 2017

160

Fiscal YearGross

Revenues*Operating Expenses*

Net Revenues (as defined)

PFC Revenues

Available for DS

Funds Available for

DS

25% PFC Revenue For DS coverage

Adjusted funds

Available for DS Debt Service

Debt Service Coverage

Adjusted Debt Service

Coverage

2017 16,625$ 12,327$ 4,298$ 1,176$ 5,474$ 294$ 5,768$ 3,650$ 1.50$ 1.58$ 2016 16,677 12,376 4,301 1,087 5,388 272 5,660 3,386 1.59 1.67 2015 16,933 12,347 4,586 1,284 5,870 321 6,191 3,956 1.48 1.56 2014 16,382 12,508 3,874 1,291 5,165 323 5,488 3,402 1.52 1.61 2013 15,890 11,731 4,159 1,938 6,097 485 6,582 4,268 1.43 1.54 2012 15,080 11,259 3,821 1,939 5,760 485 6,245 4,195 1.37 1.49 2011 14,203 10,659 3,544 1,938 5,482 485 5,967 4,366 1.26 1.37 2010 12,431 9,586 2,845 1,939 4,784 485 5,269 4,269 1.12 1.23 2009 12,706 10,456 2,250 1,965 4,215 491 4,706 4,273 0.99 1.10 2008 12,021 9,029 2,992 1,965 4,957 491 5,448 4,275 1.16 1.27

*Using Operating Revenue / Expenses Only, as calculated in the Airport Audit

Source: Data from each respective Annual Financial Report.

CITY OF BURLINGTON, VERMONTAIRPORT ENTERPRISE FUND BOND COVERAGE

LAST TEN FISCAL YEARS(In Thousands)

161

CITY OF BURLINGTON, VERMONTDEMOGRAPHIC AND ECONOMIC INDICATORS

LAST TEN YEARS

Calendar Year Population (1, 2)

Per Capita Income (1, 2)* Personal Income

State-wide Per Capita Income (3)

State-wide Median Family

Income (1)

Burlington City (3)

State-wide (3)

Enrollment Grades 9-12 (2)

High School Graduation Rate (2)

2017 44,020 25,234$ 1,110,800,680$ (4) (4) (4) (4) (4) (4)

2016 42,452 25,234 1,071,233,768 - - 3.10% 3.60% 1,067 88%2015 42,613 25,188 1,073,336,244 - 54,447 3.20% 4.10% 1,070 96%2014 42,738 25,188 1,076,484,744 45,483 54,267 3.50% 4.40% 1,048 87%2013 42,637 25,188 1,073,940,756 44,545 54,168 3.80% 5.00% 1,048 83%2012 42,450 25,188 1,069,230,600 41,572 53,422 4.30% 5.50% 1,086 85%2011 42,442 25,188 1,069,029,096 40,134 51,841 5.00% 6.10% 1,160 86%2010 42,417 25,188 1,068,399,396 39,205 51,284 5.80% 6.90% 1,187 85%2009 42,417 25,188 1,068,399,396 36,185 51,704 4.20% 4.50% 1,172 93%2008 42,417 25,188 1,068,399,396 37,949 49,382 3.50% 4.00% 1,152 81%

Sources:

(1) United States Census Bureau (2) Vermont Economic-Demographic Profile(3) Vermont Department of Labor, Economic & Labor Market Information

*Using MFRA Data(4) Information not available at the time of publication

Unemployment Rate

162

CITY OF BURLINGTON, VERMONTPRINCIPAL EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO

Employer Employees (1, 2) Rank

Percentage of Total City

Employment (3) Employees (2) Rank

Percentage of Total City

Employment (3)

University of Vermont Medical Center 5,383 1 4.30% 4,709 2 4.07%International Business Machines 4,000 2 3.20% 6,200 1 5.35%University of Vermont 3,446 3 2.76% 3,103 3 2.68%City of Burlington/Burlington School District 1,612 4 1.29% 2,650 4 2.29%People's United Bank 1,000 5 0.80% 1,208 5 1.04%Howard Center for Human Services 998 6 0.80% 727 9 0.63%Adecco Staffing 775 7 0.62% Less than 400 0.00%Ben & Jerry's Homemade 735 8 0.59% 735 8 0.63%GE Healthcare 700 9 0.56% 752 7 0.65%Dealer. Com 675 10 0.54% Less than 400 0.00%Verizon Communication 0.00% 800 6 0.69%

19,324 15.45% 20,884 18.03%

Sources:

(1) Chittenden County(2) Vermont Business Magazine, Vermont Business Directory(3) Vermont Department of Labor*Some data is not available at the time of publication.

Calendar Year 2017 Calendar Year 2008

163

CITY OF BURLINGTON, VERMONTFULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM

LAST TEN YEARS

Function/Program 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

General Government: Mayor's Office 4.00 4.00 4.00 4.00 4.00 3.00 3.00 3.00 3.00 3.00

Clerk/Treasurer's Office 20.00 26.51 21.00 19.00 20.00 20.00 20.60 19.60 20.10 20.50 Payroll 4.00 4.00 4.00 3.00 3.00 4.00 4.00 4.00 4.00 4.00 Central Computer 6.00 4.00 6.00 3.00 3.00 3.20 4.00 3.00 2.50 2.00 City Attorney's Office 8.00 8.00 8.00 7.00 7.00 7.50 7.50 7.50 6.00 5.90 Human Resources 6.00 6.00 5.50 5.50 5.50 6.00 5.00 5.00 6.00 5.00 City Assessor 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Planning and Zoning 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00

Public Safety:Fire 81.80 80.80 79.80 79.80 79.80 79.80 79.80 79.80 79.80 79.00Police 141.20 139.20 136.20 137.20 137.20 138.20 137.20 137.70 134.20 135.30DPW Inspection 5.00 5.00 4.00 4.00 4.00 3.00 3.00 3.00 3.00 3.00Code Enforcement 12.00 12.00 12.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00

Public Works:Highways 43.45 43.45 42.90 42.90 43.60 42.60 41.60 41.60 38.60 38.60Public Works Administration 4.00 4.00 4.00 6.00 6.00 6.00 6.00 6.00 6.00 5.00

Culture and Recreation 88.00 85.00 81.80 78.80 75.48 71.25 71.72 67.20 67.80 66.00

General Fund Total 434.45 432.96 420.20 412.20 410.58 406.55 405.42 399.40 393.00 389.30

Community Development*

Burlington Electric 129.00 131.90 125.00 128.00 125.00 123.00 125.00 125.00 126.00 125.00

Burlington Telecom 24.00 26.00 25.00 21.00 24.50 22.00 30.68 33.00 32.50 30.50

Burlington International Airport* 39.50 39.00 42.00 41.00

Water*

Stormwater*

Wastewater*

Total Employees 1057.40 1058.82 1028.40 1010.40 966.66 955.10 963.52 953.80 941.50 931.10

*Data is not available at the time of publication.

Full-time Equivalent Employees

164

CITY OF BURLINGTON, VERMONTOPERATING INDICATORS BY FUNCTION/PROGRAM

LAST TEN YEARS


General Government:Full-time equivalent positions filled 431.95 432.96 420.20 412.20 410.58 406.55 405.42 399.40 393.00 389.30 Tax bills mailed 10,670 10,714 10,737 10,685 10,633 11,106 11,112 11,094 11,116 11,080 Active recreation programs 283 285 Recreation participants 4,863 4,762 Birth certificatesrecorded 2,283 2,177 2,252 2,257 2,207 2,254 2,164 2,204 2,184 2,276 Marriage licenses recorded 375 229 401 599 366 362 449 462 346 354 Death certificates recorded 947 489 1,045 965 1,036 931 970 963 961 945 Dog licenses issued 1,153 1,175 1,256 1,191 1,234 1,248 1,307 1,367 1,446 1,501

Public Safety:Total cases 30,517 28,608 28,243 31,182 31,353 29,978 32,146 33,141 35,040 36,654 Number of traffic tickets 803 1,990 1,938 1,793 1,895 1,616 1,949 2,658 2,431 1,797 Number of traffic warnings 2,289 3,507 4,822 4,432 4,524 3,996 3,793 4,220 3,758 2,162 Fire incident responses 7,598 7,305 7,338 7,326 7,241 7,160 6,819 5,633 6,157 5,942

Water System:Average daily consumption (gallons) 3,703,666 3,753,328 3,976,008 3,649,433 3,953,940 4,242,691 4,228,153 4,292,238 4,163,753 4,269,552

Wastewater System:Average daily treatment (gallons) 4,722,000 4,917,000 5,132,000 5,692,000 5,677,000 5,736,000 7,132,000 5,884,000 5,932,000 6,127,000 Sludge disposed (tons) 8,651 8,633 8,583 8,402 8,287 8,322 8,873 9,809 9,058 9,250

Burlington International Airport Enplanements 597,799 595,244 600,402 617,301 605,505 652,793 643,683 677,468 743,248 725,843

Burlington Electric Department Sales to Customers - KWHs 336.2 338.2 336.2 342.8 341.4 342.5 348.6 343.9 355.6 361.4

Fiscal Year

165

CITY OF BURLINGTON, VERMONTCAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM

LAST TEN YEARS


General Government:Number of general government buildings 3 3 3 3 3 3 3 3 3 3

Public Safety:Number of police stations 1 1 1 1 1 1 1 1 1 1Number of police vehicles 45 45 45 44 44 42 42 42 42 42Number of fire stations 5 5 5 5 5 5 5 5 5 5Number of fire vehicles 20 28 27 26 26 26 26 26 26 26

Public Works:Number of public works buildings 2 2 2 2 2 2 2 2 2 2Miles of streets 95 95 95 95 95 95 95 95 95 95Miles of sidewalks 130 130 127 127 127 127 127 127 127 127

Culture and Recreation:Number of culture and recreation facilities 6 6 5 5 5 5 5 5 5 5Acres of parks 540 540 540 540 540 540 540 540 540 540

Water:Number of water treatment facilities 3 3 3 3 3 3 3 3 3 3Miles of water mains 110 110 110 110 110 110 110 110 110 110

Wastewater:Number of wastewater facilities 3 3 3 3 3 3 3 3 3 3Miles of sanitary sewers 89 89 89 89 89 89 89 89 89 89

Burlington International Airport: Number of facilities 23 23 23 23 23 23 23 23 23 23

Burlington Electric Department: Number of facilities 10 12 12 12 12 12 12 12 12 12

Fiscal Year

166

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